Intangible Assets as Financial Performance Drivers of IT Industry: Evidence from an Emerging Market

Abstract

In the past few decades, IC has been viewed as a crucial factor for improved financial performance of IT companies. Globally, the IT industry has shown positive trendlines and the tremendous importance of intangible resources as part of intellectual capital. Intellectual capital per se may not be a novel topic in the IT industry. Nonetheless, this paper focuses on determining which type of intellectual capital is paramount for financial success, which has remained an open puzzle. The aim of this paper is to analyse the human, relational, structural and innovation capital of IT companies and to measure their impact on financial performance. Moreover, the authors have analysed the impact of the intellectual capital elements on several key performance indicators as the most frequently used in these kinds of studies. In order to address this aim, the study collected primary data from 101 respondents – business owners, managers and experts from a rapidly growing IT ecosystem in South-East Europe. Most research has focused on developed countries for addressing similar topics. Therefore, the authors call out for additional research of this topic in other emerging and developing environments. The findings of this study indicate a positive effect of intellectual capital on business performance. This study raises awareness among business experts in the field of intellectual capital, and supports decision-making through the concept of identifying, managing and analysing intellectual capital and its effect on overall business results. Even though the IT industry has become global, this study draws exceptional attention to the interplay between IC and financial performance in a developing IT ecosystem setting.

Proceedings of 10th International Conference on Monitoring, Modeling & Management of Emergent Economy

“…Another reason for such results may be incomplete information about intangible assets disclosed in the financial statements of Slovak ICT companies. In turn, this is a consequence of the conservatism of the current methodology of recognizing and evaluating intangible assets, which Zhang (Zhang, 2017) also points out, Radonić et al (Radonić et al, 2021). Therefore, the findings of this study confirm the proposal of Serpeninova et al (Serpeninova et al, 2022) regarding the necessity of expanding the criteria for recognizing and the structure of financial reporting for high-tech companies regarding intangible assets.…”

“…Variables. In the research for characteristics of financial performance of ICT companies were used four dependent variables -Return on Assets, Net Profit Margin, Return on Equity, Assets Turnover, and used in their work by researchers for simiral empirical analysis of the relationship between intangibles values and company financial performance (Gan and Saleh, 2008;Dženopoljac et al, 2016;Qureshi and Siddiqui, 2020;Sundaresan et al, 2021;Radonić et al, 2021;Serpeninova et al, 2022). For explanation of a relation between intangible assets and financial performance of ICT companies used intangible assets variables -Research and Development Intensity, Research and Development Intensity Squared, Software, Intellectual Property Rights, Acquired Intangible Assets.…”

“…Radonić et al (Radonić et al, 2021) studied the role of intellectual capital components (human, relational, structural and innovation capital) in ensuring the achievement of financial performance indicators (ROA, ROE, Net Profit, etc.) of South-East Europe IT industry companies.…”

O impacto dos modelos híbridos e remoto de local de trabalho sobre o capital relacional e estrutural das empresas

“…A pandemia trouxe muitos desafios para a economia global, e com ela, novas oportunidades, tanto para as empresas quanto para os funcionários. Maior equilíbrio entre vida profissional e pessoal, melhor cuidado com os filhos, redução do tempo no trânsito e custos de transporte são apenas alguns dos benefícios que os funcionários têm experimentado (RADONIC, et al,2020).…”

“…Outros estudos, no entanto, consideram o regime de trabalho flexível uma mudança positiva para muitos funcionários em todo o mundo (Johannessen, 2018). Como um novo padrão para os locais de trabalho, muitas empresas adotaram a política de ambiente de trabalho flexível, também mencionada como modelos de locais de trabalho híbridos ou distribuídos (RADONIC, et al,2020).…”