Search results

The purpose of this paper is to study the relationship between intellectual capital (IC) and performance of pharmaceutical firms in India. The secondary objective is to propose and test modified models of Value Added Intellectual Coefficient (VAIC™) method.

Data on 22 large pharmaceutical firms collected for empirical investigation. Return on assets and return on sales are performance variables. IC and its components – human capital, structural capital and relational capital (RC), are predictor variables. Three extended and modified VAIC™ models (e-VAIC™) are proposed. Multiple regression technique is applied on pooled data to draw inferences.

Results show instances of positive relationship between IC and performance variables. RC, the new variable, does not demonstrate statistically significant relationship with performance variables.

Due to inadequate reporting of IC and its components, availability of data on various proxies is difficult. The new models proposed in this paper can be a template for future research and model development.

VAIC™ model, the proposed models (e-VAIC™) and the result analysis can be useful for evaluation and value creation purposes.

Previous researchers use original VAIC™ model. This paper modifies and extends the model in accordance with contemporary description and typology of IC. Inclusion of RC as a variable in VAIC™ model and use of new proxies for components of IC are the novelties of this paper.

The purpose of this paper, which is written in two parts, is to investigate empirically if intellectual capital (IC) has an impact on the financial aspects of organisational performance as well as attempting to identify the IC components that may be the drivers for the leading financial indicators of listed companies. The study sought evidence from the companies of the Hong Kong Stock Exchange.

Using data of all the constituent companies of the Hang Seng Index of the Hong Kong Stock Exchange from 2001 to 2005 and the VAIC™ methodology used in the measurement of IC by Pulic, regression models were constructed to examine the relationships between IC and the selected financial performance measures of these companies. Part 1 of the paper first explores a working definition of IC as well as appraising some of the methods in IC measurement. After advocating the use of VAIC™ and reviewing the relevant prior studies, research hypotheses are developed for this study. Part 1 of the paper concludes with a discussion of the research method and regression models used in investigating the hypotheses.

The results of the analysis is presented in Part 2 of the paper, which examines the association between IC, as measured by VAIC™, and the four measures of financial performance in the sample companies surveyed in Hong Kong. Part 1 of the paper develops the hypotheses for the study and establishes the research method used to investigate these hypotheses.

It is believed that this is the first study conducted in Hong Kong involving the use of VAIC™ for the measurement of IC. It not only contributes to the knowledge of IC research, but adds to the existing literature of the progress of IC development in relation to financial performance in companies internationally.

This paper seeks to provide an empirical view of the present state of intellectual capital (IC) in Finnish companies. It also examines the relationship between the concepts value of IC and efficiency of IC.

Calculated Intangible Value (CIV), which measures the monetary value of IC, and Value Added Intellectual Coefficient (VAIC^TM), which describes how a company's IC adds value to the company, were applied to approximately 20,000 companies per year during the period 2001‐2003 and studied using correlation analysis.

Value and efficiency of IC are described in 11 industries in both SMEs and large companies. The theoretically unclear relationship between the value and efficiency of IC remains vague even after the empirical analysis. Calculating the value of IC in relative terms by dividing the value of a company's IC by the value of its tangible assets was found to be illustrative in comparing different industries.

The measures used are based on financial statement information and their validity is questionable. However, the large set of data examined has a positive effect on the reliability of the study.

The results in this paper highlight the absolute or relative value, and thus importance, of IC for a company, depending on the industry.

The industry level analysis of IC and the implementation of scarcely used CIV measure in a large set of companies enhance the existing knowledge of the measurement of IC. The analysis of the relationship between CIV and VAIC^TM measures has not previously been done.

The purpose of this paper is to apply Value Added Intellectual Coefficient (VAIC™) of Pulic to compare quoted information technology and communication companies on the Istanbul Stock Exchange (ISE), in terms of intellectual capital efficiency. This study also examines VAIC™, and its components' impact on company performance.

Multiple regression analysis was employed to identify the variables that significantly contribute to the company performance. Data required to calculate VAIC™ and its components were obtained from the 2005‐2007 annual reports and balance sheets of the companies.

As a whole, all the companies had a relatively higher human capital efficiency than structural and capital efficiencies. In 2007, Turkcell was the most efficient company based on VAIC™ assessment, while Link Bilgisayar and Plastikkart were the least efficient companies. Additionally, the results of the study revealed that factors such as human capital efficiency, firm leverage, and firm size, predicted profitability well. Among them, human capital efficiency had the highest impact. In addition, capital employed efficiency was found to be a significant predictor of both productivity and return on equity, and the only determinant of market valuation was the firm size.

This study allowed ITC companies to benchmark themselves according to the intellectual capital efficiencies and develop strategies to enhance their company's performance.

This study is the first that measures intellectual capital performance and its impact on the company performance of the quoted information technology and communication companies on the ISE.

This paper aims to examine the extent to which intellectual capital (IC) adds value to a service provider and presents an approach for interpreting the results.

The value added intellectual coefficient (VAIC™) model is used to determine the relevant elements of intellectual capital because it employs existing financial data. The number of subjects was restricted to two companies operating in the Australian hotel industry over a four‐year period (2004‐2007).

The VAIC™ model provides a robust tool for assessing the efficient use of intellectual capital. The model can be used by management to assess their own organisation's performance without having to rely upon industry standards.

The data derived from published financial statements and the limitations associated with accounting standards may be questionable. However, the financial statements were subject to external audit verification. The restricted number of companies is a limitation to generalisability. However, the two companies are the major players in the Australian hotel industry.

The application of the VAIC™ model presented in this paper provides a basis for practical application for management.

The study provides management with a guide to employing the VAIC™ model and, more importantly, a method for interpreting the results.

The purpose of this paper, which is written in two parts, is to investigate empirically if intellectual capital (IC) has an impact on the financial aspects of organisational performance as well as attempting to identify the IC components that may be the drivers for the leading financial indicators of listed companies. The study sought evidence from the companies of the Hong Kong Stock Exchange.

Using data of all the constituent companies of the Hang Seng Index of the Hong Kong Stock Exchange from 2001 to 2005 and the VAIC™ methodology used in the measurement of IC by Pulic, regression models were constructed to examine the relationships between IC and the selected financial performance measures of these companies. The research hypotheses and research method are detailed in Part 1 of the paper. In this paper – Part 2, the results and findings of the investigation are analysed and discussed.

The results of the analysis revealed no conclusive evidence to support a definitive association between IC, as measured by VAIC™, and the four measures of financial performance in the sample companies surveyed in Hong Kong. At best, only a moderate association was recorded between IC and the profitability measures. The study further revealed that physical capital is highly regarded by the companies surveyed for enhancing market valuation, productivity and profitability.

Evidence from Hong Kong shows that there is an overall lack of association between IC and financial performance, which contradicts some prior studies conducted overseas. This may suggest that Hong Kong may be lagging behind, for example, some Asian competitors such as Taiwan and Singapore in IC development. In addition, the empirical results suggest that physical capital continues to play a prominent role in the territory, which may be an indication of Hong Kong's ongoing reliance on “tangibles” as the strategic asset to generate corporate performance. These findings may, however, illustrate that the association between IC and financial indicators such as market valuation may not be a universal and uniform one. Rather, the association may vary from market to market, probably depending on the level of IC awareness in the investors.

It is believed that this is the first study conducted in Hong Kong involving the use of VAIC™ for the measurement of IC. It not only contributes to the knowledge of IC research, but adds to the existing literature of the progress of IC development in relation to financial performance in companies internationally.

The purpose of this paper is to investigate the efficiency of Malaysian public‐listed software companies in transforming intellectual capital (IC) into corporate values by using the data envelopment analysis (DEA) methodology.

The authors use three individual components of value added intellectual coefficient (VAIC™) as the input variables, and Tobin's Q and return on equity (ROE) as the output variables.

Examining a sample of 25 companies, findings of this study show that companies listed on the main market of Bursa Malaysia are less efficient than those listed on the ACE market. Among the sample companies, Eduspec Holdings Berhad, which falls in the “stars” zone, is the most efficient company with the highest frequency of reference. The results remain robust despite the criticism about the validity of VAIC™ as an IC indicator.

The benchmarking analysis of this study may shed light for the managers in software companies to benchmark and improve their efficiency in IC management.

This is the first paper to examine the IC efficiency of Malaysian software companies through DEA.

The purpose of this study is to examine the dynamic relationship between intellectual capital (IC) and its components on financial performance of banks within the selected eight countries of Association of Southeast Asian Nations (ASEAN).

The study utilizes the balanced panel data of 37 publicly listed banks from eight leading ASEAN economies for the period of 2017–2021. In this sense, the authors applied the Ante Pulic's typology, i.e. value-added intellectual coefficient (VAIC™) to evaluate the efficiency of intangible and tangible assets. While, investigating the dynamic nature of relationship, the authors employed the generalized system method of moments because of its power to account for the problem of endogeneity and heteroscedasticity.

The results of the study demonstrate that banks in ASEAN countries shed a varied degree of a spotlight on VAIC™ and its components to create value. The findings revealed that structural capital efficiency is significantly associated with earning per share (EPS), return on assets (ROA) and return on equity (ROE), compared to human capital efficiency (HCE) and capital employed efficiency of ASEAN banks. These results endorse the importance of resource- and knowledge-based views of organizations to leverage the financial performance of banks. However, contrary to theoretical expectations, this study found no positive relationship between HCE with ROA and ROE. Whereas, the relationship of VAIC™ is positive and significant with EPS and ROE but it remains statistically very marginal.

There are some inherent limitations in this study that could be opportunities for future research. The current study uses the VAIC™ typology, but future researchers can use the modified value-added intellectual coefficient (MVAIC) or triangulation approach to enhance the validity and reliability of the study. Additionally, future research can investigate the similarities and differences among countries in terms of their cultural backgrounds and regulatory frameworks regarding the disclosure of intangibles. Furthermore, future research can increase the length and sample size of the study to enhance its generalizability.

The robust empirical findings extend the academic debate on IC by unveiling the dynamic nature of relationship between IC and financial performance in context of ASEAN banking sector. The findings provide plausible recommendations for policy makers (managers, regulators and stakeholders) to understand how to increase the IC efficiently, especially human capital as a source to evaluate the firms’ ability in determining value-added and financial performance. Further, findings of this study also suggest that how can policy makers get the benefit by investing more on structural capital as a valuable strategic source to guarantee the optimal performance returns.

Prior studies on IC have been country- and firm-specific, utilizing cross-sectional research designs. However, this research contributes to the limited literature by investigating the dynamic nature of the relationship between IC and financial performance of banks in the context of ASEAN countries using micro-panel data.

The purpose of this paper is to examine the relationship between intellectual capital (IC) and profitability of insurance companies in Ghana.

Data on 36 life and non-life insurance companies from 2007 to 2011 are employed to estimate the value added intellectual coefficient of Pulic (2004, 2008). Using return on assets and underwriting profit as indicators of profitability, the ordinary least squares panel corrected standard errors of Beck and Katz (2005) is used in estimating the relationship in the presence of serial correlation and heteroskedasticity. Leverage, underwriting risk and insurers’ size are used as control variables.

Non-life insurers have high IC performance comparative to life insurers. This study finds a significant positive relationship between IC and profitability of insurers in Ghana while human capital efficiency is the main driver of insurers’ IC performance.

The study discusses relevance of IC for management of insurance companies in Ghana and other emerging insurance markets in Africa.

This appears to be the first study to examine the impact of IC on profitability of a developing insurance market in Africa.

This study examines the effect of value-added (VA) intellectual capital on business performance from the perspective of productive efficiency, which is derived from its main contributors, namely, profitability and marketability efficiencies in two stages.

First, this study applies a dynamic network slacks-based measure in a data envelopment analysis (DEA) approach to estimate productive efficiency and its components of 766 Taiwan listed electronics companies over the period of 2010–2018. Second, this study performs regression analyses of the association between intellectual capital (IC), which is proxied by VA intellectual coefficient (VAIC^TM) and estimated DEA efficiency scores through various regression techniques.

Empirical evidence shows a significantly positive association between VAIC^TM and productive efficiency. This study finds the same result from the IC components after splitting VAIC^TM into (1) IC efficiency, which comprises human capital efficiency (HCE) and structural capital efficiency and (2) capital employed efficiency. Further examination reveals that HCE is the sole main contributor of the productive efficiency, and profitability and marketability efficiencies of a company.

The findings of this study highlight the need to discuss the values of intellectual coefficient (IC) from the perspective of productive efficiency for better comprehensiveness.

Although previous studies have shown that IC is a contributor of business performance, this study further zooms in VAIC and examines its effect on the efficiency of a company in transforming its inputs into outputs.