Purpose -This paper investigates the relationship between Intellectual Capital (IC), measured in terms of the Market to Book (MTB) ratio, and potential key determinants of IC value such as intangible assets (IA) and a range of other factors. Design/methodology/approach -The study is conducted for a sample of 140 Italian corporations over the period [2009][2010][2011][2012][2013]. Applying a holistic market-based approach, the relationship between IC value and selected determinants from the extant literature is tested. Five hypotheses are tested using a pooled OLS regression model, while controlling for time. ROE is employed as a useful firm profitability indicator from the perspective of an equity investor. Moreover, four robustness tests are undertaken. Findings -The results show that IA, profitability, leverage, industry type, auditor type, and family ownership positively affect IC value, whereas SIZE and AGE negatively affect IC value. Moreover, the findings of the robustness tests suggest that all firms, and not just KIBS industry firms, manage knowledge.Research limitations/implications -The validity of the findings is limited to the Italian context, as the study focuses on a sample of companies listed on the Milan Stock Exchange, all of which prepare their individual financial statements according to IFRS. Further limitations are related to the use of market value in the short term, as it is influenced by market volatility. The study may allow academic researchers to investigate the impact of other non-accounting sources of information on market value within a multidisciplinary perspective. Practical implications -This paper also has implications for managers and practitioners. The findings suggest that managers should not take for granted that firm growth (an increase in SIZE) alone will lead to an increase in IC value, in the absence of a consistent IC-oriented investment strategy. Managers should also avoid smoothing their IC investment as the company grows, in order to maintain a stable MTB ratio. Further, standard setters should seek to explore better means of disclosing non-accounting information relating to IC value. Originality/value -This paper contributes to the IC literature as it is the first study which applies the Market Capitalization approach to analyze IC value determinants in the Italian context, within the framework of IFRS. The findings reveal some interesting relationships between the MTB ratio and recognized intangible investments, which are found to be insignificant in previous studies, confirming that, through the holistic effect, the MTB ratio may be a good proxy for IC. 2 Measuring the Intellectual Capital of Italian Listed Companies ABSTRACTPurpose -The purpose of this paper is to investigate the relationship between Intellectual Capital (IC), measured in terms of the Market to Book (MTB) ratio, and potential key determinants of IC value such as intangible assets (IA) and a range of other factors. Design/methodology/approach -The study is conducted for a sample of 140 It...

The purpose of this paper is to extend the understanding of Intellectual Capital (IC) in the context of Italian listed firms. In this study, the Valued Added Intellectual Coefficient (VAIC) is employed as a measure of IC to investigate the relationship between IC, firms' financial performance and market value. The empirical investigation is developed by using data drawn from a sample of 135 Italian listed companies for the period from 2008 to 2017 and performing different Ordinary Least Squares (OLS) regression models. The findings suggest that, when taken in its aggregated form, IC exerts a positive impact on firms' financial performance measured as firms' profitability and growth in revenues as well as on market value. However, when considering its components, only Human Capital efficiency shows a positive effect on firms' financial performance while Structural Capital efficiency and Capital Employed efficiency exhibit a negative effect. Astonishingly, each of the individual IC components negatively influences firms' market value.

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The purpose of this paper is to compare two of the most commonly utilized methods employed to measure the Intellectual Capital (IC) value: Market to Book (MtB) ratio and the Value Added Intellectual Coefficient (VAIC), in order to determine the most suitable in the context of Italian listed firms and their respective relationships with some key IC determinants. The study is conducted for a sample of Italian listed firms over the period 2009-2014. Different tests are employed to compare VAIC and MtB, while two linear panel regression models with fixed effects models are performed in order to test the relationship between IC value and selected determinants. The results suggest that the MtB ratio is a better estimator of IC value than VAIC. MtB, IA and profitabilityare significant positive drivers, while leverage and size are significant negative drivers. For VAIC, only profitability and leverage are significant determinants, both having a positive effect. Recognised limitations in measuring IC value through MtB are partially mitigated because the sample is composed of listed companies preparing financial statements according to IFRS since 2005. Managers should try to avoid rigidity in their organisational structure and to focus on an IC investment strategy. The results could be beneficial for financial analysts and investors in selecting the best method for IC measurement. The paper makes an innovative comparison between two alternative IC metrics, to determine which is more effective in capturing IC value in an Italian listed firms' context. Further, it identifies some key determinants of IC value.