Purpose The purpose of this paper is to analyze the relationship between firms’ intellectual capital (IC), financial performance (FP) and market value (MV) as well as the relationship between ownership concentrations on IC performance. Design/methodology/approach A large sample of non-financial listed firms belonging to 14 countries in Western Europe, for the period between 2004 and 2015, was investigated using the GMM system (1998) dynamic estimator and the effect of lagged explanatory variables on firm’s FP and MV. Findings The results reveal that IC is an important resource for firms’ value creation. Human capital is found to be a key factor of firms’ wealth. Results show that capital employed efficiency positively impacts on firms’ FP in the short run. The impact of IC components on firms’ MV may not be immediate. The structural capital positively affects firms’ FP in the long run. Also, the results reveal that ownership concentration and owners’ management involvement constrain firms’ IC performance. Originality/value The current study contributes to IC research by exploring a large sample of firms across countries in Western Europe using econometric modeling. Considering that the effect of IC on firms’ FP needs time to be realized, thus to be measured, the effect of lagged explanatory variables on performance was tested, using dynamic panel estimators, specifically the GMM system (1998) dynamic estimator.

This paper analysed the effect of intellectual capital on small and medium-sized hotel financial performance for the period between 2007 and 2015. Using a sample of 934 Portuguese small and medium-sized hotels, this study adopted the GMM system (1998) estimator, to analyse a dynamic panel data. The findings suggested that intellectual capital components, i.e., human capital, structural capital and relational capital provide a positive impact on hotel financial performance. Human capital and relational capital seemed to be key elements for the success of hotels, being the basis of service quality in the hotels sector. Furthermore, the results showed that human capital and structural capital are capitalized by the establishment and maintenance of long-term relationships with key stakeholders. These findings indicated that the interaction between intellectual capital components enhances the hotel financial performance. Herein, it is highlighted the importance of intellectual capital in small and medium-sized hotel financial performance.

Purpose The purpose of this paper is twofold: first, to analyse the impact of intellectual capital (IC) and growth opportunities on firms’ financial performance as well as the moderating effect of IC on the relationship between growth opportunities and financial performance; and second, to analyse the impact of IC on growth opportunities. Design/methodology/approach The current study uses a sample of non-financial listed firms consisting of 14 Western European countries for the period between 2004 and 2015. The estimation method used is specifically the Generalised Method of Moments system (1998) estimator, a dynamic panel estimator. Findings The results reveal that the IC efficiency of the current period has a positive impact on the financial performance of high-, medium- and low-tech European firms. A non-linear relationship was found between growth opportunities and financial performance. Also, findings suggest that the positive relationship between growth opportunities and financial performance is enhanced with the efficient use of firms’ IC. Results indicate that the efficient use of IC in the current period has a greater impact on growth opportunities in high firms. Additionally, results reveal the presence of a non-linear relationship between ownership concentration and growth opportunities. Originality/value The current study contributes to the current literature by exploring a sample of firms across Western European countries, which is divided among high-, medium- and low-tech firms. The econometric modelling enables the author to conduct a longitudinal study.

Purpose The purpose of this paper is to analyse if capital structure decisions of small- and medium-sized Portuguese firms are in accordance with the predictions of dynamic trade-off theory, more precisely, the speed of adjustment of short-term debt (STD) and long-term debt (LTD) towards the respective target debt ratios. Design/methodology/approach Based on two samples of Portuguese firms, 1,377 small-sized firms and 811 medium-sized firms, dynamic estimators were used for the treatment of data obtained from the Amadeus database for the period 2007-2011. Findings The results indicate that small- and medium-sized firms adjust their STD and LTD ratios towards the respective target ratios. Small- and medium-sized firms present a high-speed adjustment towards the target STD ratio, suggesting that both types of firm face costs of deviating from the target capital structure, which are, probably, greater than the costs of adjustment associated with STD. However, considering the distance from the target ratio as a determinant of the adjustment speed, the results show the predominance of the negative effect of the costs of adjustment on capital structure adjustment speeds. Originality/value The results obtained for the speed of adjustment of STD and LTD, in a recession context, show that for small firms and medium-sized firms, mainly for the former, the costs of external market transactions are prohibitively high, slowing the speed of adjustment towards the target capital structure.

PurposeThis study seeks to analyse the determinants of working capital of manufacturing small and medium-sized enterprises (SMEs), particularly the effect of the probability of financial distress on working capital.Design/methodology/approachUsing panel data models, the authors analyse a sample of 3994 manufacturing SMEs for the period 2011–2017.FindingsThe results suggest that SMEs pursue conservative working capital management to avoid the failure to fulfil the commitments with creditors. Also, the positive impact of the probability of financial distress on SME working capital suggests that SMEs exposed to a higher probability of bankruptcy invest more in working capital to avoid the risk of default and financing imbalance.Originality/valueThe novelty of this study is to extend the consequences of aggressive or conservative working capital management by analysing the probability of financial distress on working capital.