Impact of intellectual capital on profitability: Evidence from software development companies in the Slovak Republic

Serpeninova, Yuliіa; Lehenchuk, Serhii; Mateášová, Martina; Остапчук, Тетяна Петрівна; Polishchuk, Iryna

doi:10.21511/ppm.20(2).2022.34

Cited by 16 publications

(13 citation statements)

References 25 publications

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“…As characteristics of the financial performance of industrial companies in Oman (PERF), a number of dependent variables were used, reflecting various aspects of such performance -earnings (Earnings before interest, taxes, depreciation and amortization (EBITDA)), profitability (Return on Assets (ROA), Return on Equity (ROE)), and productivity (Assets turnover ratio (ATO)). These financial performance measures are quite often used by scientists when conducting such studies (Xu & Wang, 2018;Xu & Wang, 2019;Öner et al, 2021;Lehenchuk et al, 2022, Serpeninova et al, 2022. Based on suggestions by Xu and Wang (2019), this paper also uses the logged value of EBITDA.…”

Section: Methodsmentioning

confidence: 99%

The Relationship Between Intellectual Capital and Company Financial Performance: Evidence From the Omani Industrial Sector

Lehenchuk,

Zaharov,

Vyhivska

et al. 2023

Preprint

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The purpose of the article is to measure, using the VAIC and MVAIC models, the impact of intellectual capital and its elements on the financial performance of Omani industrial companies listed on the Muscat Stock Exchange (MSE) from 2017 to 2021. Regression analysis using the Gretl software was applied to the study of panel data on the activities of 34 industrial companies in Oman, obtained from the official MSE website and from published financial statements. The analysis of literature sources was carried out using bibliometric analysis, the results of which were visualized using the VOSviewer software. To analyze the relationships between financial performance and its determinants (intellectual capital variables and control variables), four types of PERF models were developed, based on which sixteen models were directly examined. Four dependent variables (Earnings before interest, Taxes, Depreciation and Amortization, Return on Assets, Return on Equity, Assets Turnover Ratio) and eight independent variables (Value Added Intellectual Coefficient, Modified Value Added Intellectual Coefficient, Capital Employed Efficiency, Human Capital Efficiency, Structural Capital Efficiency, Relational Capital Efficiency, Size, and Leverage) were used to form these models. The Empirical Results section has discussed descriptive statistics and correlations, selection of estimate panel data parameter based on the F-statistics, Breusch-Pagan test, and Hausman test, assumption test results (Normality, Autocorrelation, Heteroscedasticity), and panel regression models. Analysis of the impact of VAIC, MVAIC and its elements on the financial performance of Omani industrial companies has yielded mixed results. VAIC and MVAIC in general have a significant positive effect only on ATO. For individual elements of VAIC and MVAIC, the following most significant associations with financial performance measures were found: CEE negatively affects ROE; SCE has a positive effect on l_EBITDA and ATO; RCE negatively affects ATO; l_SIZE has a positive effect on l_EBITDA and ROA; and LEV has a positive effect on ROA.

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Section: Methodsmentioning

confidence: 99%

The Relationship Between Intellectual Capital and Company Financial Performance: Evidence From the Omani Industrial Sector

Lehenchuk,

Zaharov,

Vyhivska

et al. 2023

Preprint

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“…Since the Pulic VAIC approach includes only two elements of intellectual capital -human capital (HC) and structural capital (SC) -a number of researchers have proposed expanding the classical VAIC model by adding new types of efficiency of individual intellectual capital elements to its composition. In particular, the most common options for the formation of MVAIC are the addi- Serpeninova et al, 2022), which limits the ability to identify their impact on financial performance. In this study, RCE is used as an independent variable to analyze the impact of relational capital on the financial performance of industrial companies in Oman.…”

Section: Variablesmentioning

confidence: 99%

The impact of intellectual capital on company financial performance: Evidence from the Omani industrial sector

Lehenchuk,

Zakharov,

Vyhivska

et al. 2024

Investment Management and Financial Innovations

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The article aims to investigate, using the VAIC and MVAIC models, the impact of intellectual capital on the financial performance of Omani companies listed on the Muscat Stock Exchange from 2017 to 2021. Regression analysis revealed a significant positive influence of VAIC and MVAIC only on the Asset Turnover Ratio at a 10% significance level. This suggests that an increase in VAIC or MVAIC by one unit could lead to a respective increase in earnings for Omani listed industrial companies by 0.0017 and 0.0016. However, the overall impact of VAIC and MVAIC on financial performance appears limited, necessitating measures for enhanced efficacy. Moreover, company size and leverage were found to significantly influence EBITDA and Return on Assets, suggesting the positive effect of increased activity and resource utilization. Conversely, Return on Customer Equity negatively affected only Asset Turnover Ratio, implying that investments in marketing and advertising may not significantly enhance financial performance. Human Capital Efficiency showed no significant impact on financial performance measures, highlighting the necessity for Omani industrial enterprises to focus on enhancing employee skills and experience for improved value-creation processes. These findings underscore the intricate relationship between intellectual, physical, and financial capital in shaping financial performance, necessitating targeted strategies for enhancement. Further analysis of suggested models indicated the significance of company size on EBITDA, highlighting the importance of scaling activities for performance improvement. VAIC and MVAIC structural elements showed mixed results, while Capital Employed Efficiency negatively affected Return on Equity, Structural Capital Efficiency positively impacted EBITDA and Asset Turnover Ratio.

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“…Due to the gradual formation of the knowledge-based economy, in recent years, studies of the impact of intangible factors of enterprise value creation have become especially relevant. Some scholars dedicate their papers to issues of the impact of intellectual capital on the entities' profitability (Sik & Kim, 2020;Kaymaz, Yilmaz & Kaymaz, 2019;Suherman, 2017;Seo & Kim, 2020;Petković & Dordević, 2021;Lehenchuk, Tumpach, Vyhivska, Makarovych & Lehenchuk, Mateášová, Ostapchuk & Polishchuk, 2022). Other researchers analyze the effect of certain activities on the profitability of enterprises.…”

Section: Literature Reviewmentioning

confidence: 99%

The impact of financial performance on the profitability of advertising agencies in the Slovak Republic

Lehenchuk¹,

Serpeninova²,

Завалій³

et al. 2023

Strategic Management

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Background: To improve operational and financial policies regarding the allocation of existing and obtaining new resources, strategic decision-making, managers use indicators of financial performance. Purpose: The aim of this study is to analyze the impact of financial performance on the profitability of advertising agencies in Slovakia. Study design/methodology/approach: A sample of 88 Slovak advertising agencies was analyzed by means of regression modeling the data based on financial statements of the financial year 2020. The hypothesis that the indicators of financial performance of advertising agencies in Slovakia have an impact on their profitability is partly confirmed by the results of this research. The first proposed model was adjusted by excluding the independent variable Current Ratio, which allowed us to build the second model to explain 95.21% of the Return on Assets deviation due to the variation of the selected independent variables. Findings/conclusions: By selecting Return on Assets as a dependent variable that characterizes the financial performance of advertising agencies, research has shown that Total Assets Turnover and Firm Size have significant positive influence on it, but Debt to Equity Ratio has a negative influence. This empirically testifies the expediency of financing the activities of advertising agencies from debt resources, scaling the scope of their activities and increasing sales using innovative approaches for getting more customers. Limitations/future research: The study limitations relate to completeness of information and availability of open access to the necessary data in the published financial statements of Slovak advertising agencies. The results of this research could be applicable and beneficial for providers of capital for advertising agencies. It could be also used as a tool to determine key factors of profitability and to adjust companies' financial and operational policies.

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Impact of intellectual capital on profitability: Evidence from software development companies in the Slovak Republic

Cited by 16 publications

References 25 publications

The Relationship Between Intellectual Capital and Company Financial Performance: Evidence From the Omani Industrial Sector

The Relationship Between Intellectual Capital and Company Financial Performance: Evidence From the Omani Industrial Sector

The impact of intellectual capital on company financial performance: Evidence from the Omani industrial sector

The impact of financial performance on the profitability of advertising agencies in the Slovak Republic

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