The impact of intellectual capital on firms financial performance and market value: Empirical evidence from Italian listed firms

Abstract

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.

Does investing in intellectual capital improve financial performance? Panel evidence from firms listed in Tanzania DSE

“…These findings suggest that the manufacturing and service sectors in Tanzania have not utilized efficiently their human and capital. The findings are inconsistent with Forte et al (2019) who found out that only Human Capital efficiency shows a positive effect on firms' financial performance while Structural Capital efficiency and Capital Employed efficiency exhibit a negative effect. Further, the findings show that VAIC is significantly (p ≤ 0.05) and positively correlated with HCE, CEE, and SCE.…”

“…The debate on IC is furthered by the growing desire by firms to increase investments not only in tangible assets but also in intangible assets Tran & Hong, 2020). Intangible assets are realized as, but not limited to, investments in copyrights, patents and goodwill, investments in the knowledge of staff, and relationships with key stakeholders (Asare et al, 2017;Forte et al, 2019).…”

“…Structural capital is the knowledge made by human capital that incorporates innovations, information, productions, techniques, strategies, methodology, policies, management systems, technology, economic, tax, credit, etc. (Forte et al, 2019). And relational capital is referred to as knowledge related to the association of an organization with its stakeholders, in the framework of coordinated efforts and common trust (Jummaini & Hasan, 2019).…”

“…The advantages of IC are illustrated by the transformations from the industrial economy to the knowledge economy in the first world countries (Forte et al, 2019). Indeed, less developed countries, like Tanzania, need to draw and expand this knowledge to transform their economies.…”

Relevancia de los intangibles para la valoración de las acciones de las empresas en el mercado: evidencias desde el contexto argentino

“…El capital relacional está fundamentalmente asociado al valor que generan las relaciones que la empresa entabla con su entorno, a través del intercambio de información y de productos a largo plazo con diferentes stakeholders, entre los que se incluyen: clientes, proveedores, socios aliados y accionistas (Ross et al, 2001;Forte, Matonti y Nicolò, 2019). Se trata pues de una dimensión externa a la organización, aunque en el valor de esas relaciones, como bien señala Sveiby (2018), influyen las acciones que desarrollan sus miembros, que son quienes las inician y mantienen.…”