Does Intellectual Capital Affect the Volatility of Returns? An Empirical Investigation on Italian Listed Companies

In modern information economies, economic success increasingly depends on the ability to apply knowledge and to transform it into firm value. While intellectual capital plays a critical role in firm success, it is an intangible asset that is difficult to measure and that is unrecorded by the firm. Difficulties in measuring intellectual capital, as well as the dynamic nature of the firms that rely on it, may lead to greater stock market volatility/risk. Consistent with this expectation, in statistical tests we find that intellectual capital, measured by VAIC, positively relates to the volatility of stock returns section among Italian listed companies. We find this positive relation for two components of a firm’s risk: systematic risk and specific risk. The finding is relevant to both investors concerned with understanding the risk/reward balance of particular investments and regulators concerned with market stability

Intellectual Capital Performance Sektor Perbankan Di Indonesia

The paper seeks to estimate and analyze the Value Added Intellectual Coefficient (VAICTM) for measuring the value-based performance of the Indonesian banking sector for three years, 2004 to 2006. Annual reports, especially the profit/loss account and balance-sheet of the banks concerned for the relevant years, were used to obtain the data. A review is conducted of the International literature on intellectual capital with specific reference to literature that reviews measurement techniques and tools, and the VAICTM method is applied in order to analyze the data of Indonesian banks for the three years period. The study confirms the improvement in the overall performance over three years. In 2004 and 2006, the overall performance of Indonesian banking sector is “good performers” (the VAICTM score is 2.07). While in 2005, the performance is “common performers” (the VAICTM score is 1.95)

Intellectual capital and its impact on financial performance: a study of oil and gas sector of Pakistan

The study examines the Intellectual Capital (IC) performance of oil and gas sector of Pakistan over the period of 2007 to 2011 and its impact on corporate financial returns. The study uses value added intellectual coefficient (VAICitTM) to measure IC performance and its various components of VAICitTM like (HCEit, SCEit and CEEit) and its impact on financial performance (ROEit, ROIit and EPSit). Micro panel data of oil and gas sector registered in KSE-100 index is collected from their consolidated annual reports over the period of 2007 to 2011. The IC performance is measured by Ante Pulic Model (VAICitTM) and its effect on corporate returns (ROEit, ROIit and EPSit) is tested by Random Effect Model estimation. Hausman test suggests that study accepts null hypothesis (Chi2. Prop > 0.05) where for ui is uncorrelated with regressor means that random effect is preferred versus alternative fixed effect in all the proposed research models. The study reveals that VA is considered an important component for measuring the VAICitTM performance and it has positive and significant relationship with firm’s profitability (EPSit) and HCEit and SCEit have positive and significant relationship with firm’s financial performance (ROEit and ROIit) respectively. So, this study explores that Intellectual Capital Efficiency (ICE) has relatively larger contribution for measuring the VAICitTM performance where HCEit and SCEit execute substantive role to accelerate the financial performance of oil and gas sector of Pakistan as compare to tangible assets

Intellectual Capital and Investment Opportunity Set

The purpose of this article is to investigate empirically the effect of intellectual capital on investment opportunity set in Malaysia for the period of 2006-2011. This study examined the relationship via a panel data and fixed effect regression models. Pulic’s Value Added Intellectual ‎Coefficient (VAIC™) method is used as the measure to assess the  performance of intellectual capital while factor analysis is used to construct the index of investment opportunity set (IOS). The findings showed that intellectual capital performance as the Value Added Intellectual Coefficient (VAIC), Intellectual Capital Efficiency (ICE), Human Capital Efficiency (HCE) Structural Capital Efficiency (SCE), Capital Employed Efficiency (CEE) have a significant positive effect on investment opportunity set. Since investing on intellectual capital can increase investment opportunities as a result of market value in any company, the outcomes of the current  study are significant for managers aiming to increase the market value of their respective companies

Relationship Between Intellectual Capital with Profitability and Productivity in Indonesian Banking Industry

This study aims to examine the impact of Intellectual Capital (VACA, VAHU, STVA) on profitability and productivity. The population in this study is a Banking Company listed on the Indonesia Stock Exchange from 2014 to 2016. Samples obtained by a purposive sampling method, obtained 30 banking companies from 2014 to 2016. It is an empirical study using PLS for the data analysis. The analysis using outer test models and inner model. Research results show that Intellectual Capital has positive impact to profitability (ROA). The higher the value of VAIC (Value Added Intellectual Capital), the higher the profitability of the banking company. This indicates that the company is getting better in managing the assets that result in increased return on assets owned companies measured by ROA. Intellectual Capital has a positive impact on productivity (ATO), yet VAHU and STVA has no positive and significant effect on productivity, whereas VACA has a positive and significant influence on productivity. Companies have been able to use physical capital to improve the efficiency of the company

Pengaruh Modal Intelektual terhadap Kinerja Perusahaan (Studi pada Perusahaan Perbankan yang Terdaftar di Bei Tahun 2009-2011)

The purpose of this study is to empirically examine the effect of intellectual capital on the financial performance of banking. Intellectual capital measurement model using Pulic models, which in the aggregate - Value Added Intellectual Coefficient (VAIC™) with the major components of a basic resource companies - physical capital (VACA), human capital (VAHU), and structural capital (STVA) and three elements financial performance of the banking company which consists of Return on Assets (ROA), Capital Adequacy Ratio (CAR), and the loan to deposit ratio (LDR).The data used is the banking companies listed in Indonesia Stock Exchange (IDX) 2009-2011. This empirical study using PLS (Partial Least Squares) as an analysis of the relationship between intellectual capital (VAIC™) on the financial performance of banking.The findings show that: (1) intellectual capital (VAIC™) significantly affects the financial performance of the banking company, (2) intellectual capital insignificant effect on the financial performance of the banking companies of the future, and, (3) the rate of growth of intellectual capital (ROGIC) insignificant effect on the future financial performance of banking

The impact of financing decisions of intellectual capital on firms’ financial performance and on the gap between firm’s book value and market value

With the rise of innovation-driven era, knowledge has become the most important feature in the firm’s value creating process. Academics and practitioners have been devoting their attention to the study of intellectual capital (IC) for the last two decades. IC is an emerging and fast-evolving concept and the fact that IC is a multidisciplinary and interdisciplinary concept makes the study of this complex phenomenon challenging. In this thesis, we address several research topics, some of which still are unexplored, regarding the impact of IC on firm’s financial performance, growth opportunities and financing decisions. This investigation comprises sixth empirical studies focusing on Western European countries. The first empirical paper compiled in this Doctoral thesis is entitled “A European Empirical Study of the Relationship Between Firms' Intellectual Capital, Financial Performance and Market Value”. The purpose of this paper is two-fold: (1) to analyse the relationship between firms' IC, financial performance and market value; and (2) to analyse the relationship between ownership concentration and IC performance. Results reveal that IC is an important resource for firms' value creation and human capital is found to be a key factor of firms' wealth. Also, results indicate that ownership concentration and owners' management involvement constrain firms' IC performance. The second empirical paper is entitled “Financial Performance and Intellectual Capital: An Empirical Analysis in the Context of the Euronext Market Countries”. This paper seeks to analyse the impact of IC on financial performance, using the Value Added Intellectual Coefficient (VAIC™) method, in the European context. Results suggest that IC investments have a positive impact on firms’ financial performance in the short and long run. The human capital component is of greater importance in enhancing firms’ financial performance in both previous and current periods. Also, the results reveal that firms investing in R&D have greater financial performance, while the recent financial crisis produced a negative effect on financial performance in 2008 and 2009. The third empirical paper is entitled “Intellectual Capital and Financial Performance Considering the Crisis Period: A European Empirical Study”. The objective of this paper is to analyse the impact of the IC on the financial performance measured by Return on Assets in the European context for the period 2004-2015 as well as the global financial crisis effect on firms’ financial performance. Results indicate that IC efficiency of the current period has a positive impact on the financial performance. The three components of VAICTM Model – capital employed efficiency (CEE), human capital efficiency (HCE) and structural capital efficiency (SCE) of the current period have a positive impact on financial performance, except for SCE of that for the first group of countries has a negative impact on financial performance. Also, findings suggest that the financial crisis negatively affects financial performance on both groups of countries. The fourth empirical paper is entitled “Intellectual Capital, Growth Opportunities and Financial Performance in European Firms: Dynamic Panel Data Analysis”. The purpose of this paper is three-fold: (1) to analyse the impact of IC and growth opportunities on firms’ financial performance; (2) to analyse the moderating effect of IC on the relationship between growth opportunities and financial performance; and (3) to analyse the impact of IC on growth opportunities. Findings reveal that IC efficiency of the current period has a positive impact on firm’s financial performance of high-tech, medium-tech and low-tech European firms and results indicate the non-linearity of the relationship between growth opportunities and firm’s financial performance. Findings suggest that the positive relationship between growth opportunities and firm’s financial performance is enhanced with the efficient use of firms’ IC. Finally, results indicate that the efficient use of IC in the current period has a greater impact on growth opportunities in high-tech firms. The fifth empirical paper is entitled “Intellectual Capital and High-tech Firms’ Financing Choices in the European Context: A Panel Data Analysis” and aims to analyse the impact of IC on high-tech firms’ financing choices. Results suggest that IC investments in high-tech firms have a negative impact on debt, but a positive effect on internal finance and equity issues. High-tech firms seem to rely on equity issues to finance their activities once internal finance is exhausted, avoiding debt to finance innovative projects. High-tech firms face considerable transactions costs, given the moderated adjustment of the long-term debt ratio towards the target ratio. Low ownership concentration brings a higher diversification of financing sources. Finally, the financial crisis had a negative effect on internal finance and a positive effect on long-term debt for high-tech firms. Finally, the sixth empirical paper entitled “Intellectual Capital and Firms’ Financing Decisions in the European Context: A Panel Data Analysis” analyses the impact of IC on firms’ financing decisions, specifically if intensive IC firms follow the predictions of the main finance theories, i.e., trade-off theory (TOT) and pecking order theory (POT) in their capital structure decisions. Our findings show that IC components, such as human capital and structural capital negatively impact on firm’s book leverage in both samples of firms, while the relational capital positively impacts on book leverage in high IC efficiency firms. However, results show that the interaction between the IC components, reduce the negative impact of the human capital and structural capital on book leverage. Regarding the remaining determinants of capital structure, the findings indicate a positive effect of collaterals on book leverage, which suggests the presence of information asymmetry problems as it is the case of high IC efficiency firms that face higher costs of capital and, thereby prefer internal financing due to the lower costs. The negative relationship between profitability and book leverage suggests that both types of firms prefer to resort firstly to internal financing. The negative effect of growth opportunities on book leverage represents potential risk and, therefore, firms reduce their debt levels. The speed of adjustment of debt level towards the target debt ratio is greater in high IC efficiency firms than in low IC efficiency firms.Com a ascensão de uma era baseada na inovação, o conhecimento tornou-se o recurso mais importante para o processo de criação de valor das empresas. Nas ultimas duas décadas, o estudo do capital intelectual (IC) tem recebido a atenção por parte da academia e profissionais de diversas áreas. O IC é um conceito multidisciplinar e interdisciplinar, emergente e em rápido desenvolvimento, o que torna desafiante o estudo deste complexo fenómeno. Nesta tese de doutoramento são analisados vários tópicos, alguns ainda carecem de futura investigação, relacionados com o impacto do IC na performance financeira, nas oportunidades de crescimento e nas decisões de financiamento das empresas. Assim, esta investigação é constituída por seis estudos empíricos com foco nos países da Europa do Oeste. O primeiro artigo cientifico desta tese de doutoramento tem como título “A European Empirical Study of the Relationship Between Firms' Intellectual Capital, Financial Performance and Market Value”. O propósito deste artigo cientifico é (1) analisar a relação entre IC, performance financeira e o valor de mercado das empresas, e (2) analisar a relação entre a concentração de capital e a performance do IC. Os resultados revelam que o IC é um recurso importante para a criação de valor das empresas, sendo que o capital humano é considerado o fator chave da sustentabilidade das empresas. Os resultados também indicam que a concentração de capital e o envolvimento dos acionistas maioritários na gestão das empresas restringem a performance do IC. O segundo estudo empírico intitulado “Financial Performance and Intellectual Capital: An Empirical Analysis in the Context of the Euronext Market Countries” e tem como objetivo analisar o impacto do IC na performance financeira das empresas pertencentes ao mercado bolsista Euronext. Os resultados sugerem que os investimentos em IC têm um impacto positivo na performance financeira quer a curto quer a médio-longo prazo. A componente capital humano apresenta o maior impacto no aumento da performance financeira quer no período corrente quer no período anterior. Os resultados também revelam que as empresas que mais investem em investigação e desenvolvimento apresentam melhor performance financeira. A recente crise financeira apresenta um efeito negativo na performance financeira das empresas nos anos de 2008 e 2009. O terceiro estudo empírico tem como título “Intellectual Capital and Financial Performance Considering the Crisis Period: A European Empirical Study”. Os seus objetivos são (1) analisar o impacto do IC na performance financeira no contexto Europeu e (2) o efeito da crise financeira na performance financeira das empresas. Os resultados indicam que a eficiência do IC no período corrente apresenta um impacto positivo na performance financeira. As três componentes do VAICTM, i.e., CEE, HCE e SCE, apresentam um impacto positivo na performance financeira do período corrente. Os resultados também sugerem que a crise financeira afeta negativamente a performance financeira das empresas. O quarto estudo empírico intitulado “Intellectual Capital, Growth Opportunities and Financial Performance in European Firms: Dynamic Panel Data Analysis”, tem como objetivos: (1) analisar o impacto do IC e oportunidades de crescimento na performance financeira das empresas; (2) analisar o efeito moderador do IC na relação entre oportunidades de crescimento e performance financeira das empresas; e (3) analisar o impacto do IC nas oportunidades de crescimento. Os resultados sugerem que a eficiência do IC no período corrente tem um impacto positivo na performance financeira das empresas europeias high-tech, medium-tech e low-tech, bem como a não linearidade das oportunidades de crescimento na performance financeira das empresas. Os resultados também sugerem que a relação positiva entre oportunidades de crescimento e performance financeira aumenta com o uso eficiente do IC por parte das empresas. Finalmente, os resultados também sugerem que o uso eficiente do IC no período corrente tem maior impacto nas empresas high-tech. O quinto estudo empírico é intitulado “Intellectual Capital and High-tech Firms’ Financing Choices in the European Context: A Panel Data Analysis” e prentede analisar o impacto do IC nas escolhas de financiamento das empresas high-tech. Os resultados sugerem que os investimentos em IC nas empresas high-tech têm um efeito negativo no endividamento e um efeito positivo no recurso ao financiamento interno e à emissão de ações. Aparentemente, as empresas high-tech recorrem à emissão de ações para financiar as suas atividades quando o financiamento interno se esgota evitando o recurso ao endividamento para financiar as suas atividades inovadoras. As empresas high-tech apresentam custos de transação consideráveis dado que apresentam um ajustamento moderado do seu endividamento de médio/longo prazo em direção o rácio ótimo de endividamento. Uma baixa concentração da propriedade de capital estimula uma maior diversificação das fontes de financiamento das empresas high-tech. Finalmente, a crise financeira apresenta um efeito negativo no recurso ao financiamento interno e um efeito positivo no recurso ao endividamento de médio/longo prazo. Finalmente, o sexto e último estudo empírico desta tese de doutoramento intitulado “Intellectual Capital and Firms’ Financing Decisions in the European Context: A Panel Data Analysis” e tem como objetivo analisar o impacto do IC nas decisões de financiemaneto das empresas, mais especificamente, se as empresas intensivas em IC seguem as previsões das principais teorias financeiras, i.e., trade-off theory (TOT) and pecking order theory (POT), nas decisões da sua estrutura de capital. Os resultados sugerem que duas as componentes do IC, i.e., capital humano e capital estrutural, têm um impacto negativo no endividamento de ambas as amostras estudadas, enquanto que a outra componente do IC, i.e., capital relacional, impacta positivamente o endividamento das empresas com maior eficiência no uso do IC. Contudo, os resultados sugerem que as interações entre as componentes do IC reduzem o impacto negativo do capital humano e estrutural no endividamento. Relativamente aos restantes determinantes da estrutura de capital das empresas, os resultados indicam um positivo efeito dos colaterais no endividamento, sugerindo a presença de problemas de assimetria de informação no grupo de empresas com maior eficiência do IC que apresentam um custo do capital superior e, consequentemente, preferem o financiamento interno. A relação negativa entre a rendibilidade e o endividamento sugere que ambos os grupos de empresas preferem recorrer ao financiamento interno como primeira opção para financiar as suas atividades. O efeito negativo das oportunidades de crescimento no endividamento, representam um risco potencial, e assim, as empresas tendem a reduzir os seus níveis de endividamento. Finalmente, os resultados também sugerem que a velocidade de ajustamento em direção ao rácio ótimo de endividamento, é maior nas empresas com maior eficiência do IC.This work was financially supported by Santander Universities (BID/ICI/CSH - Management/ Santander Universidades – UBI/2016)

Intellectual capital determinants of football clubs in Europe

Introduction. Existing research on football economics mostly focuses on some key performance indicators’ influence on the profitability of clubs. This assumption is a bit misleading in the context of football business models which deliver various benefits other than profits to its stakeholders. In this research, the opposite question was asked: what can determine the intangible value delivered by a football business? This is asked in light of the fact that most of the value created by the football industry belongs to the category of intellectual capital. Material and Methods. The study was based on the financial data of 33 European football clubs. Basic statistical analysis was carried out and regression analysis of chosen drivers influencing intellectual capital of football clubs in Europe was performed. Results. Three of the four assumed hypotheses were not confirmed: higher value of intellectual capital is correlated with higher profitability, higher values of IC efficiency (VAIC) are associated with higher levels of player value and values of IC efficiency (VAIC) are significantly associated with levels of sports performance. Just one hypothesis was confirmed that values of IC efficiency (VAIC) are significantly associated with salary efficiency (S/R). Additionally, the study revealed that there are two important factors influencing the value added intellectual coefficient (VAIC): debt and salaries. Conclusions. If we assume that VAIC is the goal of the managers, then the only two drivers which are significant for this value are salary ratio and leverage ratio. Moreover, we know that profit orientation of the football business in Europe is not the key goal in order to develop intangible values for the stakeholders

Does Intellectual Capital Matter? A Case Study of Indonesia Sharia Banks

This study aim is to examine the impact of Intelectual Capital (IC) on financial performance in the Islamic banking sector in Indonesia. We adopt the Pulic’s value-added intellectual coefficient (VAIC™) as the widely used measurement for IC. The paper used secondary data derived from the annual reports of eleven Islamic banks from 2012 to 2016. This study uses firm size and level of risk as a control variable. We utilise the resource dependency theory as an analytical tool. The findings show that the IC does not significantly matter and influence the profitability of Islamic banks. However, the results also show a significant impact on human capital and structural capital on profitability of sharia bank. The findings can be useful as an input for the practitioners in Islamic banks in managing their investments in IC in Indonesia Islamic banks. This paper also contributes to the theory and literature by particularly the adoption of resource dependency theory to analyse the IC in Islamic banks