Intellectual capital, growth opportunities, and financial performance in European firms

Sardo, Filipe; Serrasqueiro, Zélia

doi:10.1108/jic-07-2017-0099

Cited by 107 publications

(129 citation statements)

References 103 publications

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“…The previous literature [3,17,64,77] has proved that the lagged value of IC benefits current profitability. We use one-time and two-time lagged independent variables to examine the lagged effect of IC on bank performance.…”

Section: Additional Analysis On the Lagged Effect Of Icmentioning

confidence: 99%

“…Our study used the ratio of total liabilities to total assets (used as a proxy to measure leverage) as an endogenous variable and treated it with different lag-length (3)(4)(5), along with the lag of dependent variables. Since GMM allows the use of instruments, therefore, it is necessary to make use of valid instruments to ensure the consistency in the results of GMM.…”

Section: Robustness Checkmentioning

confidence: 99%

“…With the emergence of the age of knowledge-based economy, intellectual capital (IC) has been considering as the driving force that organizations need to gain a sustainable competitive advantage [1][2][3][4][5]. At the corporate level, IC investment is the most important determinant of performance [6].…”

Section: Introductionmentioning

confidence: 99%

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Should Listed Banks Be Concerned with Intellectual Capital in Emerging Asian Markets? A Comparison between China and Pakistan

Haris

Yao

2019

Sustainability

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The purpose of this study is to determine and compare the relationship between intellectual capital (IC) and banks' performance in China and Pakistan. The data are acquired from listed banks in these two countries during 2010-2018. The Value Added Intellectual Coefficient (VAIC ™ ) method is applied as a measure of IC. The results show that capital employed efficiency (CEE) makes the highest contribution to bank performance in both countries. In addition, the profitability of listed Chinese banks is driven by structural capital efficiency (SCE), while human capital efficiency (HCE) positively affects bank profitability and productivity in Pakistan. In addition, we find that the lagged effect of IC has a positive impact on future bank profitability. This study supports greater investment in IC in order to further improve bank performance in emerging Asian markets.Sustainability 2019, 11, 6582 2 of 23 infrastructure, which can bring great facility for companies. Following this, for the ease of channelizing the business transactions, the Bank of China (BOC) commenced its first branch in 2017 in Karachi, the financial capital city of Pakistan. However, before this only the Industrial and Commercial Bank of China (ICBC) operated in Pakistan. Both ICBC and BOC are listed Chinese banks. China and Pakistan are emerging Asian financial markets with good neighborly relations and close cooperation [24]. In emerging markets, the financing and lending role of the banking sector is utmost important for ensuring a sustained economy [17].According to the World Bank, bank capital to assets ratio in China grows from 6.60% to 8.56%, while Pakistan witnesses a downward trend (see Figure 1). Although the nonperforming loans to total gross loans in Pakistan gradually declines over the period 2014-2017, this ratio in China is much lower than that in Pakistan (See Figure 2). Haneef et al. [25] concluded that nonperforming loans have an adverse effect on the performance of banks in Pakistan. These indicate that the Chinese banking industry is much healthier than the Pakistani banking industry, and Pakistani banks operate with relatively higher risk exposure. However, the Pakistani banking system is more open as many foreign banks operating in Pakistan compared to the Chinese banking system [26]. Recently, China has revised the Regulations on the Administration of Foreign-funded Banks to lower the threshold of establishing foreign branches in China, which can stimulate the vitality of banking sector and improve the competitiveness of Chinese and foreign financial institutions. The opening up of the Chinese banking sector will provide opportunities for Pakistani banks to establish their branches in China. Considering that the competition among banks will become severer with financial liberalization, banks will expand their operation in the international market [27]. It will require that banks fully utilize local resources to improve the competitiveness under different business environment. We choose these two countries for comparison, not ...

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Section: Additional Analysis On the Lagged Effect Of Icmentioning

confidence: 99%

Section: Robustness Checkmentioning

confidence: 99%

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Should Listed Banks Be Concerned with Intellectual Capital in Emerging Asian Markets? A Comparison between China and Pakistan

Haris

Yao

2019

Sustainability

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“…Subsequently, IC was completely defined by Stewart [20] as the synthesis of an individual's knowledge and capabilities that can bring competitive advantage to a firm. Although his definition of IC is widely accepted by scholars in the world, there is still no uniform definition of IC [21][22][23].…”

Section: Ic and Its Componentsmentioning

confidence: 99%

“…For the dependent variable, firm performance is measured with return on assets (ROA), consistent with previous literature [1,5,6,22,23,30,41,42,79]. ROA measures how efficiently a firm utilizes and manages its assets to produce profits during a certain period.…”

Section: Variable Measurementmentioning

confidence: 99%

Intellectual Capital, Technological Innovation and Firm Performance: Evidence from China’s Manufacturing Sector

Shang

Wang

et al. 2019

Sustainability

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Intellectual capital (IC) is considered to be a main driver of organizational success in the knowledge economy. This study examines the impacts of three IC components, including human capital (HC), structural capital (SC), and relational capital (RC), on technological innovation and firm performance. Data are collected from 1112 manufacturing listed companies in China during 2013–17. Using partial least squares structural equation modeling (PLS-SEM), the results show that HC and SC exert a positive impact on firm performance while RC has a negative impact; SC has a positive influence on technological innovation while HC has a negative influence; technological innovation can enhance the firm’s performance. In addition, technological innovation partially mediates the relationship between SC and firm performance. This study will bridge the gap in research by investigating the impacts of IC components on technological innovation and firm performance in developing countries.

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Can intellectual capital contribute to financial and non‐financial performances during normal and crisis situations?

Lestari

Adhariani

2022

Bus Strat Dev

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The contribution of intellectual capital (IC) on financial performance have been found in previous studies but whether IC can also be utilised to improve non‐financial performance has been understudied; let alone the contributions in different economic conditions (normal and crisis periods). This study aims to provide empirical findings to answer these issues by defining non‐financial performance in terms of the environmental, social, and governance (ESG) performance and COVID‐19 pandemic to represent the crisis. Non‐financial companies listed on stock exchanges in the Southeast Asia countries that are member of ASEAN (Association of Southeast Asian Nations) were selected as the samples for the research period of 2016–2020. The results show that the IC has a positive association with financial performance but a negative relationship with ESG performance. With the COVID‐19 pandemic as the moderating variable, the results show that the pandemic period is not found to moderate the effect of the IC on financial performance and ESG performance. These results indicate that under normal conditions prior to the economic crisis caused by COVID‐19, companies in Southeast Asia prioritised the use of IC to improve financial performance. Meanwhile, during the COVID‐19 pandemic, companies in the region have not utilised IC to improve their financial and non‐financial performance. The findings that IC affect ESG performance negatively need a serious attention amid the increasing awareness of sustainability and the expected role of corporate in the achievement of the Sustainable Development Goals (SDGs).

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Intellectual capital, growth opportunities, and financial performance in European firms

Cited by 107 publications

References 103 publications

Should Listed Banks Be Concerned with Intellectual Capital in Emerging Asian Markets? A Comparison between China and Pakistan

Should Listed Banks Be Concerned with Intellectual Capital in Emerging Asian Markets? A Comparison between China and Pakistan

Intellectual Capital, Technological Innovation and Firm Performance: Evidence from China’s Manufacturing Sector

Can intellectual capital contribute to financial and non‐financial performances during normal and crisis situations?

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