Search Results (17)

This research examines the relationship between capital structure, intellectual capital, and financial performance among insurance companies in Sub-Saharan Africa (SSA). Anchored in a positivist paradigm, the study employed descriptive and quantitative methodologies, leveraging secondary panel data spanning from 2010 to 2022 across 122 insurance firms sampled from a population of 178 companies across 46 SSA countries. Utilizing a Panel Vector Error Correction Model (P-VECM), the analysis explored long-term equilibrium relationships and dynamic interactions among variables, including return on assets (ROAs), debt-to-equity ratio (DER), long-term debt (LTD), short-term debt (STD), Value-Added Intellectual Coefficient (VAIC™), and firm size (SIZE). Optimal lag lengths were determined through robust statistical criteria, ensuring model precision. The impulse response analysis revealed significant findings: variations in ROA negatively impacted intellectual capital (VAIC), leverage indicators (DER, LTD, and STD), and positively influenced firm size over a ten-period horizon. Specifically, decreases in ROA were consistently associated with reduced intellectual capital effectiveness and adverse financial liquidity conditions, while increased firm size correlated positively with improved financial performance. Full article

This study explores the relationship between intellectual capital (IC) and the financial performance of 250 publicly traded companies in France, Germany, and Switzerland from 2009 to 2018, addressing the gaps in prior research regarding the differential impacts of IC components across countries and industries in Western and Central Europe. Using the Value-Added Intellectual Coefficient (VAIC™) approach, this study evaluates human capital efficiency (HCE), structural capital efficiency (SCE), and capital employed efficiency (CEE). Panel regression analyses at the country and industry levels were conducted to assess their effects on financial metrics, such as return on equity (ROE), return on assets (ROA), and asset turnover ratio (ATO). The findings reveal a significant positive association between SCE, CEE, and firm performance, with CEE showing the most substantial effect, while HCE had a relatively weaker impact. Additionally, the study uncovers a trade-off between the accumulation of patents and trademarks and short-term financial performance, raising new considerations for intellectual property management. This research contributes to the literature by providing a nuanced understanding of how IC components influence financial outcomes across different contexts and offers practical insights for firms aiming to optimize structural capital and capital-employed strategies for improved financial performance while acknowledging the limitations regarding the sample of publicly traded firms. Full article

In the knowledge era, intellectual capital has been considered a key factor in creating value within organisations. This study examines the relationships and interactions between the components of intellectual capital and the profitability of Panamanian banking and financial institutions listed on the Latin American Stock Exchange (LATINEX) from 2014 to 2020. A theoretical framework based on agency theories, signalling theory, and stakeholder theory was employed to support the results. The Valued-Added Intellectual Coefficient (VAIC)™ model, which evaluates the intellectual capital of organisations based on information from financial statements, was also utilised. In this study, stepwise regression was applied to select the optimal number of predictors to be included in each multiple regression model to examine the relationship between the return on equity (ROE) and the components of the VAIC™ in addition to control variables such as size and indebtedness. The findings confirm this study’s hypothesis, demonstrating that the structural capital efficiency (SCE) and company size (SIZE) variables explain 57% of the variance in the ROE for the analysed institutions. The results suggest that the intellectual capital (IC) of financial sector institutions listed on LATINEX is significantly influenced by the SCE coefficient, which shows a negative relationship, suggesting that investment in structural capital does not enhance profitability. On the other hand, larger institutions exhibited higher profitability during the study period. This study was limited to the analysis of two sectors: banking and finance in companies listed on LATINEX. However, its rigorous theoretical and empirical foundation opens the way for future research in which other sectors can be considered, and cross-country comparisons can be made, strengthening the research in this field for Latin America. At the same time, this study offers market regulators a scientific methodology to oversee the activities of issuing companies. Full article

This research is focused on knowledge-based performance drivers, which are often intertwined with intellectual capital (IC); specifically, the value-added intellectual coefficient (VAIC) and its profound influence on labor productivity (LP), with the pivotal inputs of training and research and development (R&D) as moderating, in the realm of small- and medium-sized (engineering) enterprises (SMEs). The aim is to offer this as a sustainable model for practical implementation to empower engineering managers, donors, and policy researchers. The motivation catalyzes more informed decision-making investing in human or structural capital. It attempts to foster sustainable growth and societal stability through job creation within the knowledge-intensive engineering sector of developing countries. Methodologically, the research draws upon statistical analysis, employing Pearson’s correlation, multivariate regression, and model testing executed through specialized statistical software. The World Bank Enterprise Survey Instrument was used to collect data on 213 aviation-related firms. Primary data were collected for the years 2013–2022. Several hypotheses were developed between the variables expected to relate positively, because intellectual capital, training, and research and development should lead to better labor productivity. The findings revealed the critical issue of the misallocated investments in structural capital that this model brought forth. Furthermore, the notable contribution to national intellectual capital (NIC) studies is the significant VAIC value of 4.58 and an impressive labor productivity value of 6.78 within the knowledge-intensive ecosystem of SMEs. More insightful findings were the modest 17% positive variation attributable to the VAIC on LP, accompanied by an absence of significant influence exerted by training and R&D on this relationship. While underscoring the model’s overall validity, this intriguing discovery emphasizes the impact of intangibles on knowledge firms’ overall sustainability calculations, specifically structural capital, which accounts for a substantial 31% of labor productivity. The practical implication is that this model can be used to expose long-term financial performance hiccups through intellectual capital measures. The novelty is employing the labor productivity metric sourced from the engineering literature instead of the customary asset productivity (ATO) ratio from the IC literature. Full article

The manufacturing industry makes a significant contribution to Russia’s GDP and exports, but it faces problems that hinder its development. The aim of this study is to estimate the relationship between intellectual capital and performance indicators of Russian manufacturing companies. The study analysed a sample of 23,494 observations of Russian manufacturing companies for the 2017–2020 period. The value-added intellectual coefficient (VAIC) and its components were used to evaluate the impact of intellectual capital on firm performance using polled ordinary least squares, fixed, and random effects models. Intellectual capital significantly and positively affects the performance of companies in both structural and human terms—both through the integrated coefficient VAIC and in the context of individual components of intellectual capital. However, the impact of structural and human capital on performance indicators is significantly lower than the impact of capital employed. There is a distinct focus of enterprises on making profit through the use of company assets, while in the case of Russian manufacturing companies, the potential for profit generation from structural and human capital remains unfulfilled. Full article

This study aims to examine the impact of intellectual capital and intangible value on the performance of listed non-financial firms in West Africa. The study used the Value Added Intellectual Coefficient (VAIC™) to measure intellectual capital performance (with components as ICE—Intellectual Capital Efficiency an additive measure of the next two metrics, HCE—Human Capital Efficiency, SCE—Structural Capital Efficiency and CEE—Capital Employed Efficiency), financial ratios to measure intangible value and return on assets to measure performance while controlling for firm-level and macroeconomic variables. Using the panel-corrected standard error regression on 59 firms operating from 2007 to 2018, the study found that VAIC, ICE, HCE and SCE measures of intellectual capital are the pièce de résistance that drive the performance of firms. It is found that the relationship is curvilinear taking the shape of an inverted U. CEE does not drive the performance of firms, and asset tangibility inhibits performance but the investment in intangible fixed assets has a positive insignificant effect on performance. Firm size has a positive impact while financial leverage has a negative impact on performance. Human development does not drive performance but foreign direct investment and economic development do. There are country-specific insights where in Ghana intellectual capital and intangible value have a very strong positive effect on performance, followed by a relatively high impact in Cote D’Ivoire while there is a weak effect in the Nigerian context. The study also explores the effect of other variables such as firm size, financial leverage, human development, foreign direct investment and economic development. The findings are useful for policy, accounting, finance, economic and human resource practitioners as well as, for the academic community. Full article

This paper uses the value-added intellectual coefficient (VAIC) to assess the performance of Islamic banks (IBs) by measuring return on assets (ROA) and income from financing Islamic banks (IFIB). The model tests the relationship between intellectual capital (IC) and IB performance in various regions using a panel data regression methodology with a fixed-effects model and IB financial data for the period 2009–2019 from the BankScope database. The empirical results show that VAIC has a significant positive effect on IB performance using both ROA and IFIB proxies. Furthermore, human capital and capital employed efficiency have a positive relationship with ROA and IFIB, while structural capital efficiency has a relationship with ROA, but is not related to IFIB. The results can be used by companies in strategic decision making related to IC, especially human capital, structural capital, and employed capital. Full article

In this study, we explore the association between the intellectual capital (IC) efficiency of firms and their voluntary disclosure of environmental, social, and governance (ESG) information, using data on Jordanian listed firms and the value-added intellectual coefficient (VAIC) model with its three components of human, structural, and relational capital efficiency (HCE, SCE, and RCE, respectively). We find that disclosing environmental information is unrelated to IC efficiency, that disclosing governance information is associated with raised IC efficiency through the HCE and RCE components, and that disclosing social information is negatively associated with IC efficiency through the SCE and RCE components. We also find that releasing information on one or two of the three ESG dimensions has a positive effect on IC efficiency. This evidence has implications for the management of intangible assets. Full article

Intellectual capital (IC) has become a crucial strategic resource in the knowledge economy. The purpose of this study is to understand the IC-financial performance relationship of listed Chinese agricultural companies. This paper uses the original value added intellectual coefficient (VAIC) model, the adjusted VAIC (AVAIC) model, and the modified VAIC (MVAIC) model to measure IC. The results show a positive and significant relationship between IC and financial performance (return on assets and return on equity) in three models. Additionally, human capital and physical capital are two major driving forces. In the AVAIC model, innovation capital exerts a positive impact on financial performance, whereas this impact is not significant at the 5% level in the MVAIC model. The results suggest that further improvements in IC measurement are still needed. This study has important implications for both academia and industry regarding IC measurement. Full article

Economic efficiency is a function of two types of resources: those that are presented in financial statements and those that are not. Non-balance sheet resources are referred as to intellectual capital (IC). The purpose of the paper is to investigate the relationship between IC, its components and the level of financial profitability. To conduct the analysis, we used the system generalized method of moments for a broad sample of Russian firms that operate in the agribusiness industry. We employed two financial approaches to IC estimation. The first one is the Value Added Intellectual Coefficient (VAIC). The second one is own-created approach that is supposed to respond the criticism regarding VAIC. Comparison between VAIC and own-created approach to IC estimation revealed that the latter is more appropriate due to its advantages. Our approach unlike VAIC allows measuring both efficiency ratios and the stocks of IC. The results showed that the efficiency of structural capital usage and the stock of human capital have the biggest impact on the profitability level of the agricultural businesses among employed measures of IC. Full article

This study empirically presents evidence of nonlinearity and heterogeneity relation between intellectual capital and risk-taking for the Vietnamese banking system. We used quantile regression methods on a data set of 30 Vietnamese banks from 2007 to 2019. The results showed that bank insolvency was positively affected by its value-added intellectual coefficient (VAIC) at the upper quantiles (i.e., 80th and 90th), while the opposite was true for credit risk (i.e., 10th and 20th quantiles). When observing the VAIC’s components, risk-taking behaviors were also significantly affected by HCE (Human Capital Efficiency), CEE (Capital Employed Efficiency) and SCE (Structural Capital Efficiency) at the 90th quantile of instability distribution and the 10th quantile of credit risk distribution. Furthermore, the results also emphasized that there was an inverse U-shaped association between intellectual capital and bank risk-taking. Therefore, this study provides important implications for policymakers, regulators, bank managers and academics that encourage increasing investment in knowledge assets to minimize bank risks in the long run. Full article

The study is devoted to the analysis of the efficiency of use and the effectiveness of disclosing the intellectual capital (IC) of a trading company operating in the market of the Russian Federation. The subject of the research is an assessment of the quality of disclosure of information about the IC company involved in the creation of financial results of activities and the growth of the company’s value. The study examines the assessment of IC and the search for links between the involvement of IC in the formation of the financial result of a trading company and the degree of its reflection in the company’s annual reports. Methods of using intellectual value-added coefficients (VAIC) such as the trademark logo (written as ™), Calculated Intangible Value (CIV) and content analysis of the company’s annual reports are used to assess the IC and its elements. The influence of IC and its components, on the financial results of a trading company are also investigated and calculated using various methods. It is shown that there are no statistically significant relationships between the assessments of IC and its elements obtained using financial ratios, and those obtained using content analysis. This indicates that the opinions and assessments of the heads of a trading company regarding IC are formed regardless of the size of IC involved in the formation of economic results and testifies to the absence of an effective investment management policy in the studied company. Some of the results obtained confirm the trends in IC structures previously observed for companies in other industries. The results also indicate that the existing system for preparing annual reports does not sufficiently consider the size, dynamics and efficiency of using the intangible assets of a trading company. The results of this study are likely to be useful to management and academics. Full article

In this paper, we expand the value-added intellectual coefficient (VAIC) model by constructing a comprehensive financial capital (FC) component. Human capital efficiency is subdivided into executive (EHCE) and nonexecutive human capital efficiency (NHCE). We have sampled listed agriculture companies (LAC) in China’s Shanghai and Shenzhen A-share markets from 2009 to 2018 and categorized them as high-tech (HTAC) and non-high-tech agriculture companies (NHTAC). We find that capital employed efficiency (CEE) and EHCE have a significant positive effect on corporate sustainable growth (CSG) of HTAC but no significant effect on CSG of NHTAC, while FC has a significant positive effect on both. These results suggest that companies, especially HTAC, should invest in human capital, and their executives and policymakers should develop effective knowledge management tools and begin accumulating the necessary intellectual capital to allow adaptation to their changing environment. In the spirit of the intellectual agriculture concept, we present some new ways to study the performance of agricultural companies using intellectual capital and offer suggestions that can help to modernize the industry. Full article

In the knowledge-based economy, knowledge is regarded as a strategic resource that helps entities to become market leaders. This strategy has been successfully used for years by companies operating in various sectors of the economy. The exception, however, is agriculture, which has been seen for years as a sector with low knowledge intensity and is one that is skeptical about the possibility of using knowledge. This is important especially in that the use of it is, for many managers, still unconscious, and, therefore, this factor remains unused in practice. This paper describes the Intellectual Sources of Value Added (ISVA), an alternative method for analyzing the productivity of tangible and intangible inputs affecting the value-adding process in agricultural holdings. The reasons for developing the concept of that indicator were the imperfections found in the Value-Added Intellectual Coefficient (VAIC™), a widely adopted method authored by A. Pulić. However, the index of efficiency of intellectual capital (VAIC), recognized as suitable for research purposes, demonstrates certain methodological imperfections, including the simultaneous use of resource- and flow-based values. In addition to certain relevant reservations, the above has other consequences, including the declining trend followed by the efficiency of working capital calculated using this formula. In a situation where working capital is observed to grow, this would mean that funds are irrationally invested in assets with a decreasing capacity to add value. This results in drawing a false picture of economic realities of agricultural holdings which, by nature, demonstrate a high share of physical asset consumption in total production costs. As another consequence, the calculated value of the indicator becomes unacceptable in the long run. The use of the ISVA indicator allowed the author to obtain homogeneous results in terms of methodology and confirming the regularities observed in practice. In addition, the research confirmed not only the fact that agricultural enterprises have intellectual capital resources, but also the high efficiency of their use, exceeding the efficiency of use of traditional ones. It also indicates the desirability of continuing research using measures that will enable the monitoring of intellectual capital and their use in agricultural enterprises. Full article

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. Full article