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Article
Publication date: 29 April 2021

A. D'Amato

The purpose of this paper is to analyze the relationship between intellectual capital and firm capital structure by exploring whether firm profitability and risk are drivers of…

1482

Abstract

Purpose

The purpose of this paper is to analyze the relationship between intellectual capital and firm capital structure by exploring whether firm profitability and risk are drivers of this relationship.

Design/methodology/approach

Based on a comprehensive data set of Italian firms over the 2008–2017 period, this paper examines whether intellectual capital affects firm financial leverage. Moreover, it analyzes whether firm profitability and risk mediate the abovementioned relationship. Financial leverage is measured by the debt/equity ratio. Intellectual capital is measured via the value-added intellectual coefficient approach.

Findings

The findings show that firms with a high level of intellectual capital have lower financial leverage and are more profitable and riskier than firms with a low level of intellectual capital. Furthermore, this study finds that firm profitability and risk mediate the relationship between intellectual capital and financial leverage. Thus, the higher profitability and risk of intellectual capital-intensive firms help explain their lower financial leverage.

Research limitations/implications

The findings have several implications. From a theoretical standpoint, the paper presents and tests a mediating model of the relationship between intellectual capital and financial leverage and its underlying processes. In terms of the more general managerial implications, the results provide managers with a clear interpretation of the relationship between intellectual capital and financial leverage and point to the need to strengthen the capital structure of intangible-intensive firms.

Originality/value

Through a mediation framework, this study provides empirical evidence on the relationship between intellectual capital and firm financial leverage by exploring the underlying mechanisms behind that relationship, which is a novel approach in the literature.

Details

Managerial Finance, vol. 47 no. 9
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 1 August 2004

S. Bose and K.B. Oh

In an evolving business environment characterised by globalisation and a challenging competitive paradigm, it is imperative for strategic management processes to focus on the…

2981

Abstract

In an evolving business environment characterised by globalisation and a challenging competitive paradigm, it is imperative for strategic management processes to focus on the financial perspectives of value and risk in intellectual capital to create sustainability in long‐term value. This paper presents the key issues pertaining to the strategic management of value and risk in intellectual capital and presents some hypotheses for a strategic management framework based on identified underlying value‐drivers, which in turn helps to focus and address the issue of risk management more adequately. The pervasive value‐drivers in three intellectual capital‐intensive sectors in Australia are identified from an analysis of case studies, then specified and extrapolated to provide implications for the strategic management of value and risk in the knowledge‐based firms. The strategic management implications of these value‐drivers are discussed and explained.

Details

The Learning Organization, vol. 11 no. 4/5
Type: Research Article
ISSN: 0969-6474

Keywords

Article
Publication date: 23 October 2007

Tobias Sällebrant, Joakim Hansen, Nick Bontis and Peder Hofman‐Bang

The purpose of this paper is to present an empirical research study which took a novel examination of the relationship between risk and transparency with regards to a company's…

2361

Abstract

Purpose

The purpose of this paper is to present an empirical research study which took a novel examination of the relationship between risk and transparency with regards to a company's intellectual capital assets. The objective of this study is to evaluate how the systematic and idiosyncratic risk of publicly traded companies correlates with the degree of available information regarding their intellectual capital statements.

Design/methodology/approach

Intellectual capital is measured within the framework of a rating system that includes 44 parameters within eight focus areas. These data were collected from key informants at eight publicly traded IT companies in Sweden.

Findings

The results show a negative correlation between idiosyncratic risk and transparency and a positive correlation between market risk and transparency. However, the correlation between risk and transparency may partly be explained by organization size.

Research limitations/implications

This study was based on a small set of firms within one country so generalizability is limited.

Practical implications

The suggested methodology of intellectual capital measurement has since been used by over 400 organizations across four different continents.

Originality/value

This methodology consists of both qualitatively metrics as well as quantitative metrics that are then triangulated together to test various hypotheses.

Details

Management Decision, vol. 45 no. 9
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 1 April 2006

John Holland

This paper aims to explore how fund managers (FMs) deal with major problems of ignorance and uncertainty in stock selection and in asset allocation decisions.

3941

Abstract

Purpose

This paper aims to explore how fund managers (FMs) deal with major problems of ignorance and uncertainty in stock selection and in asset allocation decisions.

Design/methodology/approach

Interviews were conducted with 40 fund managers in the period October 1997 to January 2000. A seven stage approach was adopted to sift through and process the large volumes of case data. The interview case data formed the basis for identifying common patterns and themes across the cases.

Findings

The case data revealed the nature of this private information agenda concerning intellectual capital or intangibles and the dynamic connections between these variables in the value creation process. The case data provided insight into how the book value and market value gap arose and the special role of information on intangibles and intellectual capital in valuing the company.

Practical implications

The fund management behaviour has important implications for regulatory policy issues on insider information, on corporate disclosure, the corporate governance role of financial institutions, and for the governance of financial institutions.

Originality/value

The paper focuses on issues of importance in an increasingly concentrated and global FM industry.

Details

Managerial Finance, vol. 32 no. 4
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 13 April 2020

Aleksei V. Bogoviz

The purpose of the research is to determine the perspective directions of state regulation of competition between human and artificial intellectual capital in Industry 4.0 and to…

Abstract

Purpose

The purpose of the research is to determine the perspective directions of state regulation of competition between human and artificial intellectual capital in Industry 4.0 and to develop scientific and methodological recommendations for their implementation. For this, the directions of state regulation of competition between human and artificial intellectual capital are described, monitoring of competition between human and artificial intellectual capital by the example of modern Russia (2019) is performed and scientific and practical recommendations for state regulation of competition between human and artificial intellectual capital are developed, with their approbation by the example of modern Russia (2019).

Design/methodology/approach

A method of expert evaluation is used for collection of the information and empirical data. The method of comparative analysis is used for comparing the successfulness of implementing the distinguished directions of state regulation of competition between human and artificial intellectual capital (4.1) according to the official statistics to their current evaluation according to the interested parties. Also, future evaluation (forecasts) according to the interested parties (until 2045) is determined.

Findings

It is substantiated that during evaluation of state regulation of competition between human and artificial intellectual capital in Industry 4.0, one cannot use only the official statistics, as these data are fragmentary and indirect. Fuller and more precise data are provided by assessment according to the interested parties. They allow determining the current and the future state of affairs and, based on it, compiling a forecast and developing a long-term strategy of state regulation of competition between human and artificial intellectual capital in Industry 4.0.

Originality/value

The perspective directions of state regulation of competition between human and artificial intellectual capital in Industry 4.0 are as follows: stimulation of competition in the market of intellectual capital, social risk management of the market of intellectual capital, managing international competition in the market of intellectual capital and ecological risk management of the intellectual capital market. As the experience of modern Russia shows, even at the initial stage of transition to Industry 4.0, the measures of state regulation of competition between human and artificial intellectual capital are not enough, but their deficit is moderate. In the course of development of Industry 4.0, the necessity for the measures of regulation will grow, and their deficit will increase. That's why there's a need for strategic approach to their implementation, which envisages their systemic reconsideration and supplementing. An author's algorithm is offered for this.

Details

Journal of Intellectual Capital, vol. 21 no. 4
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 2 September 2021

Marcelo Henrique Gomes Couto, Fábio Lotti Oliva, Manlio Del Giudice, Masaaki Kotabe, Tachia Chin and Peter Kelle

The purpose of this paper was to present the stages of the Brazilian startups' organizational life cycle (OLC), identifying and describing the main factors related to the…

Abstract

Purpose

The purpose of this paper was to present the stages of the Brazilian startups' organizational life cycle (OLC), identifying and describing the main factors related to the entrepreneurial and organizational perspectives, as well as the factors related to external relationship agents and the associated risks at each OLC stage. In addition, the variables that comprised the three perspectives above were used for a descriptive reading of the evolutionary process from the perspective of intellectual capital during the stages.

Design/methodology/approach

The type of research used was quantitative with a descriptive character. For data collection, the authors have used the survey method and two complementary questionnaires were used as research tools. The measurement scale used in these instruments was the 11-point Likert scale. In total, 100 Brazilian startups registered in the STARTUPBASE and residents in São Paulo comprised the sample of this research. For the data processing, it was used the exploratory factor analysis techniques, to identify the analysis factors, and the cluster analysis, to identify the OLC stages.

Findings

Based on the results obtained, four stages were identified and described to build the OLC model of this research: Stage I – conception and development; Stage II – organization and traction; Stage III – growth and scale; and Stage IV – consolidation and transition. In addition, the authors described the main lines of evidence found at each stage.

Practical implications

This research contributes to academic studies of the OLC in startups and the evolution of risks that originate from the relationship between external agents in the business environment and startups. Thus, a management map is built, which helps entrepreneurs and managers construct these businesses since such a management map allows identifying the risks and challenges that a startup needs to overcome to grow and develop.

Originality/value

The originality of this research lies in the adaptation of the OLC approach, which is widely used in studies analyzing the growth and development of mature organizations. The authors used this adaptation to analyze the growth and development of startups in Brazil. In addition, the identification and analysis of external agents that make up the business environment, as well as the analysis of the risks, originated from the relationships between the startup and these agents, brought original and essential results and discussions, both for OLC studies and for risk analysis studies in startups.

Details

Journal of Intellectual Capital, vol. 23 no. 6
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 25 July 2008

Magdi El‐Bannany

The purpose of this paper is to investigate the determinants of intellectual capital performance in the UK banks over the period 1999‐2005.

5679

Abstract

Purpose

The purpose of this paper is to investigate the determinants of intellectual capital performance in the UK banks over the period 1999‐2005.

Design/methodology/approach

Multiple regression analysis is used to test the relationship between the intellectual capital performance as a dependent variable and certain independent variables.

Findings

Results indicate that the standard variables, bank profitability and bank risk, are important. The results also show that investment in information technology (IT) systems, bank efficiency, barriers to entry and efficiency of investment in intellectual capital variables, which have not been considered in previous studies, have a significant impact on intellectual capital performance.

Research limitations/implications

More evidence is needed on the determinants of intellectual capital performance before any generalisation of the results can be made. In addition, the empirical tests were conducted only on the Major British Banks Group over the period 1999‐2005 and hence the results of the study cannot be assumed to extend beyond this group of banks or to different study periods.

Practical implications

The study might help the banking regulators in addressing the factors affecting intellectual capital performance to take actions towards developing their performance and in turn maximise their value creation.

Originality/value

This paper adds to the literature on the determinants of intellectual capital performance in banks. In particular, it tests the theories that investment in IT systems, bank efficiency, barriers to entry and efficiency of investment in intellectual capital have impact on intellectual capital performance.

Details

Journal of Intellectual Capital, vol. 9 no. 3
Type: Research Article
ISSN: 1469-1930

Keywords

Open Access
Article
Publication date: 2 September 2019

King Carl Tornam Duho and Joseph Mensah Onumah

The purpose of this paper is to examine the impact of intellectual capital and its components on bank diversification choice.

4806

Abstract

Purpose

The purpose of this paper is to examine the impact of intellectual capital and its components on bank diversification choice.

Design/methodology/approach

Both asset and income diversification are computed and an unbalanced panel data set of 32 banks covering the period 2000–2015 have been used. The panel corrected standard error regression has been used to account for serial correlation and heteroscedasticity.

Findings

The study found that intellectual capital determines the choice of diversifying. Precisely, intellectual capital motivates asset diversity but it dissuades income diversification. Human capital and structural capital are major components that determine asset diversity decisions. Income diversification decision, in this case to choose a focus strategy, is determined by human capital. This gives credence for the human capital theory in Ghana. Competition encourages a focus strategy. Bank size and leverage enhances income diversification while stock exchange listing and government ownership fosters the focus strategy.

Practical implications

Diversification strategy, knowledge base of staff, corporate governance and internal control have been considered as factors leading to the collapse of some Ghanaian banks in 2017–2018. The study provides relevant insights for regulators, decision support units and corporate boards. Intellectual capital and value added metrics should be used for modelling and decision making as they have value relevance.

Originality/value

This is a premier study that has examined the nexus between diversification strategy and intellectual capital in banks.

Details

Asian Journal of Accounting Research, vol. 4 no. 2
Type: Research Article
ISSN: 2443-4175

Keywords

Article
Publication date: 10 February 2012

Irinja Mäenpää and Raimo Voutilainen

The purpose of this paper is to analyse how insurances can be used in the management of human capital risks. The issue is highlighted in the context of small and medium‐sized

2882

Abstract

Purpose

The purpose of this paper is to analyse how insurances can be used in the management of human capital risks. The issue is highlighted in the context of small and medium‐sized enterprises (SMEs).

Design/methodology/approach

Building on literature on intellectual liabilities, the paper provides a comprehensive picture of human capital related risks, emphasising their effects on SMEs. The issue is analysed empirically through a qualitative case study of an insurance company.

Findings

The paper divides the identified human capital risks into insurable and uninsurable risks, determining a specific insurance solution for each insurable risk. Based on the results, pension, accident, health, life, liability and crime insurances are the most useful types of insurances for the management of human capital risks.

Research limitations/implications

The generalisability of the findings is limited by the methodological choice. As the study is conducted from the viewpoint of an insurance provider, it does not consider the effectiveness of the suggested insurances in practice. Thus, more empirical studies on the approach are called for.

Practical implications

This paper creates a basis for the better recognition of the various human capital risks in companies and describes how insurances can be applied for the management of these risks.

Originality/value

In addition to considering human capital risks as an entity, the paper contributes to the research on knowledge asset protection by examining a practical risk management method for these risks. According to the authors' knowledge, insurances have not been introduced in this context before.

Article
Publication date: 13 April 2012

Julia Brunold and Susanne Durst

This study aims to shed light on the phenomenon of intellectual capital (IC) risks. More precisely, the perception of such risks in the context of the job rotation process often…

4101

Abstract

Purpose

This study aims to shed light on the phenomenon of intellectual capital (IC) risks. More precisely, the perception of such risks in the context of the job rotation process often applied in multinational corporations (MNCs) is to be investigated.

Design/methodology/approach

Eleven semi‐structured interviews are conducted in an exemplary knowledge‐intensive MNC operating in the construction industry. Six interviews among top managers and five interviews among participants in the job rotation process are carried out to gain insights from different perspectives.

Findings

The study underlines the influence of time pressure on the perception of the variety of IC‐related risks in general and of those related to the job rotation process. As a result, the risks are not tackled even though the managers are aware of some of them.

Research limitations/implications

The data were collected in one organization, making inferences about the findings not possible. Future studies should consider multiple organizations.

Practical implications

A list of potential IC risks triggered during the job rotation process is presented and suggestions to tackle them are discussed. Furthermore, the findings can contribute to the further development of an overall overview of IC risks.

Originality/value

The study provides fresh insights into the relationship between IC risks and job rotation as perceived by different organization members.

Details

Journal of Intellectual Capital, vol. 13 no. 2
Type: Research Article
ISSN: 1469-1930

Keywords

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