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A value-added view of intellectual capital and financial performance in knowledge management: A case of Chinese insurance companies
Abstract
Intellectual capital (IC) has a strong linkage to knowledge management thus influencing financial performance. Using resource-based view theory, this paper aims to explore the relationships between intellectual capital and financial performance based on the data of 220 Chinese insurance companies listed in China Insurance Yearbook, from 2008 to 2017. Our study is robust for using Value-Added Intellectual Coefficient (VAICTM) and ratios as the proxies of IC, as well as return on assets and return on equities as the proxies of financial performance. Panel data regression and ordinary least squares are applied to analyse the data. Apart from the popular direct effect, we also find significant positive (negative) effects of increasing (decreasing) IC on increasing (decreasing) financial performance. However, we find no dynamic relationship between IC and financial performance. This paper provides scholars and practitioners with new perspectives on IC learning and management.
... Tahir et al. (2018) specifically discovered that IC has a positive impact on banks' profitability. Furthermore, a multitude of research investigations have subsequently validated the positive role of IC in financial performance (Ren et al., 2021). However, Mehralian et al. (2012) found mixed results, concluding that IC enhances profitability but does not explain an organization's market value and productivity. ...
Purpose
Intellectual capital (IC) is a paramount resource for competitiveness in the knowledge-based financial sectors of the economy. As financial technology advances, specifically in the banking industry, it is vital to understand the effect of IC on financial performance. This study aims to investigate the effect of IC on return on equity (ROE), with a unique emphasis on the moderating role of board attributes. Previous studies have overlooked this moderating role.
Design/methodology/approach
The study sample consists of 17 banks and a panel data set spanning 2016–2021, extracted from annual reports. Antel Pulic’s value-added intellectual coefficient (VAIC) model is used to compute IC. To analyze the data, a generalized least squares analysis is conducted. The robustness of the analysis is ensured by using the two-stage least squares (2SLS) econometric technique.
Findings
The findings indicate that both the VAIC and human capital efficiency (HCE) have a significant impact on the ROE of banks. In terms of moderation, it is observed that board size (BS) exerts a negative effect on the association between VAIC, HCE, structural capital efficiency and ROE. Additionally, BS positively compounds the connection between capital employed efficiency and ROE. Similarly, the presence of independent directors (IND) significantly moderates the effects of VAIC and its components on the ROE of banks in Pakistan.
Practical implications
Banks should focus on the HCE for a higher ROE. Moreover, banks ought to prioritize appointing more independent directors in the boardroom for effective utilization of IC and greater ROE.
Originality/value
The findings of the study, which analyzed data from Pakistan’s banking sector, are original and provide additional insights into the literature on IC and board attributes.
... Knowledge management is strongly related to the intellectual capital of the organization (Ren et al., 2021). Human, structural and innovation capital have a positive impact on financial performance, and intellectual capital as a key factor of knowledge management helps organizations to gain a sustainable competitive advantage, and its effective use is reflected in the improvement of the financial performance of organizations (Xu et al., 2023). ...
The research problem represents the fact that knowledge management is not a term that is often mentioned in the domestic economy and it can be said that it is still an underdeveloped area. The aim of this paper is to examine the level of efficiency of knowledge management and its impact on the financial performance of companies in the territory of Vojvodina. The survey included 126 employees in production and service companies. The independent variable is represented by an instrument for examining the level of implementation of knowledge management through nine dimensions, and the dependent variable is represented through the dimension of financial performance, which consists of seven items. The results show that the level of implementation of knowledge management is above average. A significant positive influence and connection between knowledge management and the financial performance of companies was also determined, especially when it comes to organizational culture, employees, knowledge acquisition process, knowledge conversion process, knowledge protection process, and competitive advantage. One of the key guidelines for further research refers to the integration of knowledge management with the specific characteristics of the domestic business environment. It is recommended to repeat the analysis of the impact of knowledge management on the financial performance of domestic companies in the established time frame and in the stipulated organizational conditions.
... Pulic (2000) introduced the value-added intellectual coefficient (VAIC TM ) to measure IC from an accounting perspective. Although the VAIC TM has been criticised because of its invalid measurement of IC (Marzo, 2022), it is generally an accepted tool since it employs verifiable data and it provides quantifiable and comparable results (Ren et al., 2021). Additionally, the UK Department of Business, Innovation and Skills has utilised the formula of VAIC TM for obtaining the efficiencies of IC, validating the methodology of VAIC TM (Zeghal and Maaloul, 2010). ...
This study examines: 1) how intellectual capital (IC) investment nonlinearly affects firm performance; 2) how controlling shareholders moderate the nonlinear association between IC investment and firm performance. This study utilises the value-added intellectual coefficient to proxy for the efficiencies of IC and its components, namely, human capital, structural capital and capital employed. Panel regression analysis is conducted utilising data from 733 Malaysian public listed companies for the period 2009–2018. The positive effects of intangible components of IC investments vanish after a certain optimal breakpoint. Regression results also indicate that controlling shareholders moderate the nonlinear impacts of IC and component investment on firm performance except for human capital efficiency. This study is the first to examine the role of controlling shareholders in moderating the relationship between IC investment and firm performance with a joint investigation of controlling shareholders, IC, and firm performance.
... The value distribution can be seen more evenly by this method of scaling by total assets. This method of scaling the components of IC from those of total assets is also partially in line with the study of Ren et al. (2021). More precisely, the findings reveal that NHCE and NSCE are positively significantly contributing towards firm profitability. ...
... Pulic (2000) introduced the value-added intellectual coefficient (VAIC TM ) to measure IC from an accounting perspective. Although the VAIC TM has been criticised because of its invalid measurement of IC (Marzo, 2022), it is generally an accepted tool since it employs verifiable data and it provides quantifiable and comparable results (Ren et al., 2021). Additionally, the UK Department of Business, Innovation and Skills has utilised the formula of VAIC TM for obtaining the efficiencies of IC, validating the methodology of VAIC TM (Zeghal and Maaloul, 2010). ...
This study examines: 1) how intellectual capital (IC) investment
nonlinearly affects firm performance; 2) how controlling shareholders moderate the nonlinear association between IC investment and firm performance. This study utilises the value-added intellectual coefficient to proxy for the efficiencies of IC and its components, namely, human capital, structural capital
and capital employed. Panel regression analysis is conducted utilising data from 733 Malaysian public listed companies for the period 2009–2018. The positive effects of intangible components of IC investments vanish after a certain optimal breakpoint. Regression results also indicate that controlling shareholders moderate the nonlinear impacts of IC and component investment
on firm performance except for human capital efficiency. This study is the first to examine the role of controlling shareholders in moderating the relationship between IC investment and firm performance with a joint investigation of controlling shareholders, IC, and firm performance.
... Using a sample of 56 general insurance companies during the period of 2008-2019, Olarewaju and Msomi [51] highlighted that IC helps to improve firm profitability. Xu and Liu [6], Neves and Proença [52], and Ren et al. [53] also found the same results. However, according to Firer and Williams [54], there is no relationship between IC and financial performance. ...
The objective of this paper is to examine the relationship between intellectual capital (IC) and firms’ financial leverage by exploring whether firm profitability mediates this relationship, using a dataset of Chinese agricultural listed companies during the period of 2014–2020. Financial leverage is measured by the debt-to-asset ratio, and IC is measured via the modified value-added intellectual coefficient (MVAIC) model. The results reveal that financial leverage is lower in firms with higher levels of IC, and IC positively affects firm profitability. In addition, firm profitability partially mediates the relationship between IC and financial leverage. When MVAIC is disaggregated into its four components, firm profitability has a partially mediating effect on the relationship between physical and human capitals and financial leverage. This paper might provide corporate managers with a clear understanding of IC’s impact on firm indebtedness.
... It is well understood that senior managers with strong strategic leadership capabilities can help their organisations capitalise on intangible assets -also termed as the intellectual capital of the firm -thereby ensuring a sustainable competitive advantage. Numerous researchers have noted (e.g., Bontis, 2000;Ahmed et al., 2019;Mubarik et al., 2019;Ren et al., 2021) that intellectual capital not only helps to face external challenges but also plays an instrumental role in maintaining a market response that may be challenging to initially asses (e.g., recovery from COVID-19) (Kearns and Sabherwal, 2006;Perrott, 2007;Kavida and Sivakoumar, 2009;Baima et al., 2020). Furthermore, the academic literature contains a plethora of studies that highlight leadership, its styles and norms, and its juxtaposition with various firm-level variables. ...
... The value distribution can be seen more evenly by this method of scaling by total assets. This method of scaling the components of IC from those of total assets is also partially in line with the study of Ren et al. (2021). More precisely, the findings reveal that NHCE and NSCE are positively significantly contributing towards firm profitability. ...
The paper aims to investigate the impact of intellectual capital on firm value in the context of Vietnam. The research sample includes 61 manufacturing companies listed on Vietnam stock market for the period from 2013 to 2018. Three statistical methods approaches are employed to address econometric issues and to improve the accuracy of the regression coefficients include Ordinary Least Square (OLS), Random Effects Model (REM) and Fixed Effects Model (FEM). This research uses value-added intellectual capital (VAIC) to measure the intellectual capital of a firm. Value-added intellectual capital (VAIC) is considered as an effective measure by which a company uses material, financial, and intellectual capital to increase. The VAIC includes the sum of three components: Human Capital Efficiency (HCE), Structure Capital Efficiency (SCE) and Capital Employed Efficiency (CEE, including physical and financial capital). In this paper, firm value is measured by Tobin’s Q ratio. Some control variables such as leverage, firm size, growth rate, and state capital are used in the regression model that pointed out the impact of intellectual capital on a firm value. The empirical results show a statistically significant positive impact of value-added intellectual capital (VAIC) on a firm’s profitability. This evidence provides a new insight to managers on how to improve the value of manufacturing companies listed on Vietnam stock market.
Purpose - The purpose of this study is to find the evidence to enhance the existing literature due to the lack of consensus for the impacts of intellectual capital on firm value. By employing some distinctive proxies for human capital, innovation capital, customer capital, and process capital, this study might provide valuable information for firms to make strategic decisions.
Design/methodology/approach - This study uses Tobin’s Q to represent firm value and various variables to be the proxies for intellectual capitals. Due to utilizing firm-year observations, this study applies panel data models firstly and Petersen regression models for further investigation to enhance the robustness of the empirical results.
Findings – Firm value is affected positively by the average net profit per employee as well as goodwill and intangible assets. This is because firms with abundant knowledge employees will possess advantage for innovation and the excellent reputation, a part of goodwill for oriental firms, would encourage people to consume and invest more.
Research limitations/implications - The constraint of data resource is the main limitation. With the limited scales and as an emerging market of TWSE, the revealed results are not confirmed whether appropriate for the developed markets. Nevertheless, firms should make efforts on developing intellectual capital and corporate governance for operating businesses with competitiveness and safety.
Originality/value - Since capable employees enhance the innovation; innovation improves customer’s satisfaction; and good customer relationship increases the sales, this study illustrates that firms should make more efforts on developing intellectual capital for expanding businesses.
Purpose: This article aims to provide a bibliometric and systematic literature analysis of studies published in the Journal of Intellectual Capital (JIC) from 2014 to 2018 in order to highlight emerging themes and future trends.
Methodology: The analysis focused on 187 papers published in the JIC over five years. A scientometric approach to data mining enabled the detection of patterns in the dataset. Precisely, the investigation was conducted by integrating a bibliometric analysis on VOSviewer with a systematic literature review.
Findings: Four main streams of research have emerged in the JIC during the years of the analysis: reporting and disclosure of intellectual capital; intellectual capital research in universities, education and public sector; knowledge management; intellectual capital, financial performance, and market value.
Research implications: The study offers compelling insights into the topics covered by the Journal of Intellectual Capital by identifying the main research gaps and trends along with future research avenues.
Originality: Prior scholars mostly focused on systematic literature reviews, while the use of bibliometric methods generally seems to be a missing tile in the research domain. Also, none of the extant studies have focused on the Journal of Intellectual Capital regarding the 2014 to 2018 period. The use of both bibliometric and systematic approaches to literature review delivered remarkably fine-tuned results in terms of factors such as citations, contents, and evolution of clusters over time.
While prior research examines how firms’ specific capabilities achieve organizational performance, few studies take a holistic perspective. In this study, we adopt a holistic model to examine how different capabilities actually account for organizational performance. We also consider how intellectual capital mediates the relationships between organizational capabilities and performance. We conducted a questionnaire survey involving 167 managers in the Taiwan Transportation Vehicle.
Manufacturers Association (TVMA). Using the structural equation modelling (SEM) based on partial least squares (PLS), we find that market knowledge, relationship and innovative capabilities, have positive effects on intellectual capital, while customer knowledge capabilities have no significant effects. Intellectual capital partially mediates the relationships between organizational capabilities and organizational performance. We contribute to the literature on organizational capabilities, by demonstrating the mediating effects of intellectual capital on the relationships between organizational capability, both in its external and internal dimensions, and organizational performance, as well as suggest to firms aiming to enhance organizational performance, particularly those in the transportation industry.
The purpose of this paper is to empirically examine the effect of intellectual capital on the financial performance of the central public sector enterprises (CPSEs) operating in India and also to analyse the contribution made by each component of intellectual capital in the financial performance of the organisation. Secondary data were collected from the constituent companies of the S&P Bombay Stock Exchange (BSE) CPSE index from 2009 to 2018. VAIC™ methodology developed by Professor Pulic has been employed for measuring the intellectual capital efficiency of the CPSEs. The results revealed that intellectual capital shows a weak relationship with profitability (ROA) and market valuation (MB), but it acts as a strong predictor of productivity (ATO). Also, the result shows that human capital is the most significant element among all the three components of intellectual capital, in enhancing the financial performance of the CPSEs.
This research analyzes the impact of Intellectual Capital (IC) on the financial performance (FP) of hotels in Mauritius using a sample 43 hotels for the period 2007 to 2017. This study departs from the related literature methodologically as it uses a dynamic panel data framework that takes into account the dynamic nature of the hypothesized link, while simultaneously catering for possible indirect and endogenous effects. The results show that IC enhances corporate FP, with a reported lower effect in the short run as compared to the long run. Asset turnover and size are the other important determinants of FP. Leverage, on the other hand, is observed to impact on FP adversely. Our findings also confirm that FP of the hotels is also a significant determinant of intellectual capital, suggesting the existence of reverse causal effects. Finally, there is also evidence that size positively influences intellectual capital.
Based on the latest method of total factor productivity research at home and abroad, this paper uses the panel data of 17 Chinese life insurance companies from 2007 to 2016 to estimate the total factor productivity of Chinese insurance companies using the Malmquist index analysis method of DEA model. The measurement method is a regression analysis of several factors affecting the total factor productivity of Chinese insurance companies. The empirical results show that among the micro factors, the asset-liability ratio, asset turnover, operating efficiency and company size have a significant impact on the total factor growth rate of Chinese life insurance companies. Among the macro factors, GDP growth rate, inflation rate and unemployment rate have a significant impact on the total factor growth rate of Chinese life insurance companies.
Purpose
The purpose of this paper is to, the first of its kind, investigate the relationship between the intellectual capital efficiency and organisational performance of the pharmaceutical sector in Bangladesh, an emerging economy that enjoys Trade-Related Aspects of Intellectual Property Rights (TRIPS) relaxation.
Design/methodology/approach
The study used hand-picked data from annual reports for five years. The relationship between efficient use of intellectual capital and corporate performance was examined through the practical use of human capital, structural capital and capital employed. Multiple regressions were used to assess their impact on financial performance – specifically, return on assets, return on equity, asset turnover and market-to-book value.
Findings
Value-added intellectual coefficient components (i.e. human capital, structural capital and capital employed) significantly explained asset turnover and return on assets but failed to predict the return on equity outcome. Additionally, asset turnover was negatively influenced by structural capital and positively influenced by capital employed. The return on assets was mostly affected by variation in human capital. Intellectual capital did not predict market-to-book value or investment decisions.
Practical implications
This paper provides useful resources for evaluating the financial performance and value creation of companies in emerging economies that enjoy TRIPS exemptions; this research could also be extended using cross-industry comparisons. The findings have theoretical and practical implications, particularly for the pharmaceutical industry in emerging economy contexts, and for managers globally.
Originality/value
This study is among only a few that have reported on the relationship between intellectual capital efficiency and value creation in emerging economy contexts.
Purpose
As the carrier of knowledge, intellectual capital plays a crucial role in technology capability. However, most of the previous studies focus on technological capability from a static perspective, rather than take dynamic technology capability into consideration. Based on this research gap, the purpose of this paper is to investigate the effects of intellectual capital and its sub-dimensions on dynamic technology capability, measuring by the factor scores of five technological input and output variables.
Design/methodology/approach
The authors combine the system dynamic method and empirical study to guarantee the internal and external validity. Specifically, the authors design the system dynamic model and simulation to analyze the system mechanism of intellectual capital and its sub-dimensions on dynamic technology capabilities from four cause and effect feedback loops. Then, the authors propose eight hypotheses based on this system dynamic model. In the empirical test phase, the authors employed a panel data set pertaining to Chinese manufacturing firms from 2007 to 2017, and adopted the fixed effect panel model according to Hausman test.
Findings
The authors find that intellectual capital efficiency (ICE) and its sub-dimensions (i.e. human capital efficiency, organizational capital efficiency and capital employed efficiency (CEE) have significantly positive impacts on dynamic technology capability. The results also show that the positive effects of ICE and OC on dynamic technology capability would be strengthened in state-owned enterprises compared with non-state-owned enterprises, while this moderation effect is weakened on the relationship between CEE and dynamic technology capability.
Originality/value
In this study, the authors first introduce the system dynamic method to explore the relationship of intellectual capital and dynamic technology capability, which is a valuable trial on combining system science and empirical study. Additionally, the authors continue to expand the dynamic technology capability from the intellectual capital perspective, and also find the moderating effect from the ownership aspect. It is beneficial to the theoretical development of intellectual capital and dynamic technology capability. Furthermore, the authors provide significant inspirations and implications for enterprise’s managers.
The idiosyncratic and knowledge-intense nature of the financial institutions requires them to rely more on intangible than on tangible resources. Over the past two decades, researchers have been motivated to embark on the relationship between intellectual capital (IC) and performance of financial institutions. Considering the knowledge-based intellect as a critical skill of this era, the current study examines the impact of IC on the performance of 111 Pakistani financial institutions (PFIs) over the period 2007–2018. Two IC measures, i.e., value-added intellectual coefficient (VAIC) and modified value-added intellectual coefficient (MVAIC), were applied to examine the impact of IC on profitability and productivity. Robust results from the fixed effect regression and generalized method of momentum affirm the inverted U-shaped relationship between IC and performance, suggesting that the increase in IC performance of PFIs increases their profitability and productivity up to a certain level, and after that, a further increase in IC performance decreases profitability and productivity. The results further suggest that human capital is the most influencing intellectual resource which produces higher intellectual efficiencies and increases the performance significantly. The results of this study are likely to be helpful for management, regulators, policy makers, and academics and provide insights into the importance of IC and suggest that the investment in the IC improves the sustainable performance to a certain extent.
The aim of this paper consists in providing a general overview of the notion of intellectual capital as a key to maximizing the corporate performance. Following the researches carried out, we present the delimitations of the intellectual capital in relation with human capital, relational capital and structural capital. In terms of its measurement, we focus on a question which could be a solid base for the next studies: “Can intellectual capital be evaluated?” In this regard, a number of methods (direct and methods based on assets returns), generic model and individual company models were presented, concluding in this way with a hierarchy in terms of utility and their importance.
The article builds on the current debate on how accounting tools can assist top management teams to manage their resources, while communicating a variety of data and information about value creation to their stakeholders. Within this debate, the study focuses on a recent tool for corporate reporting, the Integrated Reporting (〈IR〉), and investigates its utility to support the development of a holistic model for managing strategic resources to create value. To operationalize the 〈IR〉 according to this perspective, the article combines 〈IR〉 with the Dynamic Resource-Based View (DRBV) of the firm on the basis of their common idea that strategic resources are interconnected and have to be managed with the collaboration of all stakeholders in order to inform governance actions and create value with a holistic perspective. For the two case studies analyzed, the information provided by the two organizations’ 〈IR〉 is specifically organized and re-framed using “resource mapping”, which is a DRBV-based visual and analytical technique representing the causal relationships between resources and governance actions. In this way, we not only aim to re-organize and visualize existing information into a new form, but we also expect to describe and communicate the dominant logic in the business and the leverage points where the value creation process lies, supporting the usefulness of Integrated Reporting as a management and governance tool.
Purpose - The purpose of this study is to find out the intellectual capital disclosure (ICD) and its determinants in the pharmaceutical and chemical industry of Bangladesh.
Research design, data, and methodology - This research study is conducted on the listed firms of pharmaceutical and chemical industry in Bangladesh during the period of 2016 to 2017. This study develops a self-structured intellectual capital disclosure index; and the proxies of determinants of ICD are used as board characteristics (board size, independent directors and female directors), ownership structures (institutional ownership and director ownership), and firm characteristics (firm size, leverage and performance). The study uses a content analysis to analyze the extent of ICD and a pooled cross-sectional method to find the determinants of ICD.
Research Findings - This study finds that intellectual capital disclosure is positively associated with firm size, leverage, and firm performance and negatively associated with director ownership and institutional ownership. This study also finds that there is no significant association of ICD with independent director or female director.
Conclusions - The study recommends that the regulatory authority should develop mandatory guidelines on ICD for ensuring proper and consistent disclosure about the intellectual capitals. Besides, the companies should include a separate section in the annual reports to disclose the measurement and management of intellectual capital.
This study analyses the association between intellectual capital (IC) and firm performance and the differential impact of IC on firm performance between firms with and without government ownership. Data on the top 200 companies listed on the Malaysian Stock Exchange from 2010 to 2015 are used to estimate the value added intellectual coefficient (VAIC™) model. The ordinary least squares results indicate that firms with and without government ownership differ in firm performance and IC. Capital employed efficiency (CEE), human capital efficiency (HCE), and total IC have significantly positive impacts on firm performance. However, the significantly positive impacts of CEE and HCE on firm performance are only found in firms without government ownership. The significantly negative effect of government presence is confirmed in the pooled data analysis, whereby only CEE is significantly related to firm performance for firms with government ownership.
This study examined the relationship between voluntary disclosures (VD) and intellectual capital (IC) efficiency. The independent variables constitute 12 VD self-constructed indices with total 55 disclosure items. HCE, SCE and CEE form the components of the dependent variable which is IC efficiency. Four control variables used for measuring the relationship between VD and IC. A pooled data of 150 observations from Bahrain listed firms for the period 2011-2015 was examined, a multiple regression model was incorporated under random-effect method. The analysis indicates that disclosure index of corporate information is the highest 89.3% whereas the annual report disclosure index ranked Bahraini firms the lowest disclosure with 57.1%. The findings revealed VD positively affect the components of IC. VD indices found to be higher with firm's big assets/older age. General corporate information/financial indexes found higher in younger firms. It was found more VD the higher IC Efficiency since VDI found to be significant in all models.
Purpose
This study aims to examine the factors influencing enterprise risk management and propose a framework for identifying and explaining the components of enterprise risk management. To enable broader analytical thinking about risk factors, the framework utilizes the resource-based theory to link various classes of risks to an extended set of organizational resources.
Design/methodology/approach
The paper opted for an exploratory study using a sample from an online survey. The survey subjects were recruited from the membership database of the American Institute of Certified Public Accountants, focusing primarily on CFOs. The survey consisted of six sections: demographics, a section on each of the four risk types included in ERM: strategic risk, operational risk, financial risk and hazard risk, and exit questions (where very general questions about ERM were asked). The survey yielded a data set of 227 valid responses.
Findings
Using the associated sample survey data, the paper provides empirical validation of the proposed framework that managers in any organizations could use to identify and manage risks.
Research limitations/implications
The proposed model does have limitations that predominantly exist from the fact that human judgment in decision-making is not always data-driven, and hence, a proper risk exposure could be ignored based on pure arguments of cost and benefits from domain experts. Therefore, researchers and practitioners are encouraged to test the proposed framework further.
Practical implications
Risk exposure is not a snapshot event in an organization’s time horizon. Rather, risk identification is an ongoing process and the proposed framework allows organizations to handle increasing complex risks and/or identifying them based on how the organizational resources may be exposed over time. Managers could use a form of risk control analytics (monitoring dashboard of all identified risks under each interaction sets on a regular basis) to become more proactive in managing risk or exploiting opportunities across enterprise.
Originality/value
This paper fulfills an identified need to study how enterprise risks exposure can be proactively assessed and managed.
The paper aims at investigating the effect of intellectual capital (IC) on the performance of financial institutions in Bangladesh. Quantitative data are collected from 49 financial institutions listed in the Dhaka Stock Exchange (DSE) for the year ending 2012 and 2013. IC is measured using Value Added Intellectual Coefficient (VAIC) developed by Pulic (1998). The impact of both the current and past years VAIC on firm performance is measured, along with the effects of its three components human capital efficiency (HCE), capital employed efficiency (CEE), and structural capital efficiency (SCE). The stepwise regression results indicate a positive and significant relationship between current year VAIC and two measures of firm performance (ROA, ROE) while past years VAIC is found insignificant for all three measures of firm performance. HCE for the current year is found to be the most significant contributor toward firm performance among all the three components of VAIC, having a substantial positive relationship with all three measures of firm performance. SCE of the current year significantly affects ROA and ROE whereas CEE is found to be significant only for ROA. While measuring past years effect on performance, only HCE has been found to have a negative influence on current years revenue growth (RG).
As knowledge has become a key factor of competitive advantage for organizations, regions, and nations, its measurement has gained tremendous importance. During the last two decades, the intellectual capital school of thought has produced numerous measurement frameworks and models for capturing the intangible bases of value creation, which currently occupy a well-established position in academia. In this paper, we argue that something important might have been lost along the way, namely, a thorough understanding of knowledge as the basis for human and organizational productive behavior. We argue that in order to remain relevant in the face of the increasing knowledge intensity of work, organizing, and value creation, the measurements of intellectual capital (IC) should revisit the foundations of what knowledge is. In order to regain this understanding, this paper draws on a knowledge-based perspective and proposes four critical themes that should be better recognized in IC measurement: multi-dimensionality, human agency and action, contextuality, and temporality and dynamics. We discuss the challenges that each theme poses for IC measurement and construct a set of criteria and applications for a more adequate measurement of IC.
From the perspective of intellectual capital theory, this paper attempts to evaluate the operating performance of Taiwan's accounting firms in the four dimensions, namely human capital, process capital, innovation capital and customer capital. It then constructs a multiple regression performance evaluation model. The results suggest that the operating performance is better for firms with young employees, a majority of field staffs, high invested labor cost, long business age, more management consulting firms, high marketing expense ratio, and provision of services in China. Overall, the human, process and customer capitals are major dimensions that affect the CPA industry in maintaining good operating performance. The findings can serve as a reference to the operating performance evaluation of accounting firms, and establishment of a well-planned management system, thus bringing positive benefits for the service quality and operating performance of the accounting firms.
Purpose
This study sheds light on the relation between intellectual capital and firm performance. The study argues that traditional performance measurement based on accounting is still able to explore the relation between intellectual capital and performance.
Design/methodology/approach
The study was conducted at 198 firms from two Gulf Cooperation Council countries: Kingdom of Saudi Arabia and Kingdom of Bahrain for the period 2014–2016. To measure intellectual capital, the value added intellectual coefficient model was adopted along with two measures of performance: accounting-based performance which is return on assets and market-based performance which is Tobin’s Q, in addition to the Random-Effects Regression.
Findings
Study findings came up with evidences that support the relationship between intellectual capital and accounting-based performance, but negates any relation between intellectual capital and market-based performance. The findings also revealed different results, between Saudi Arabia’s and those of Bahrain.
Originality/value
The study contributes to the debate on the validity of relating intellectual capital to the traditional accounting-based performance.
The concepts of intellectual capital and competitiveness are widely studied issues among researchers during the last few decades. Intangible assets have been proved to be the fundamental source of value and competitiveness in modern enterprises. Intellectual capital is a valuable invisible resource which drives firm’s growth and provides superior value for stakeholders. Therefore, the aim of the paper is to examine the role the intellectual capital has in creating and sustaining competitive advantage of enterprises from the resource-based perspective.
The sustainability of South African telecommunications companies is under threat. Such threats are as a result new regulations that allowed influx of new entrant in the form of ISPs (Internet Service Providers) and the emergent of over-the-top (OTT) applications in recent years. This research seeks to understand the factors that influence a sustained competitive advantage despite all the challenges in the telecommunications industry in South Africa. The research explained the relationship that exist between service quality and sustained competitive advantage as well as the relationship that exist between intellectual capital and sustained competitive advantage. The study looked at the influence from both an internal perspective and external perspective. The internal perspective analysed the three constructs that make up intellectual capital namely; human capital, structural capital and relational capital. The external perspective used the SERVQUAL model to analyse how customers perceive services they expect to get from the telco providers and how they perceive the services after an encounter with the telco provider. The SERVQUAL model looks at five constructs of service quality namely; tangibility, reliability, responsiveness, assurance and empathy. The results of the study show that in the telco industry, relational capital is the most important dimension of intellectual capital followed by human capital, with structural capital coming up last. On the service quality variable, the research shows that customers see assurance as the most important dimension of service quality. With this in mind, the telco companies need to focus on their relational capital and human capital which includes customers and suppliers. They also need to focus on the assurance and responsiveness part of service quality. These variables will then influence future behaviour of customers (external view) as well allow employees to forge relationships that are long lasting and develop skills continuously (internal view). These dimensions are critical for the telco providers to achieve a sustained competitive advantage.
The current study seeks to analyse the impact of the intellectual capital (IC) on the financial performance measured by Return on Assets in the European context for the period 2004-2015. This study uses data of non-financial listed firms of 8 European countries for the period between 2004 and 2015. Considering that financial crisis had different impact on European countries, we divided the eight countries in two groups: (1) group 1 – Greece, Portugal, Spain and Italy; and (2) group 2 – Germany, France, Finland and United Kingdom (UK). The estimation method used is the GMM system (1998) estimator, as a dynamic panel estimator, which allows to do longitudinal studies and to analyse the effect of lagged explanatory variables on firms’ financial performance. The results indicate that IC efficiency in the current period has a positive impact on financial performance. The three components of VAICTM Model - capital employed efficiency, human capital efficiency and structural capital efficiency in the current period have a positive impact on financial performance, with the exception for structural capital efficiency which for the first group of countries has a negative impact on financial performance. Finally, results suggest that the financial crisis negatively affects financial performance on both groups of countries. The current study contributes to the current literature, analysing the impact of IC on firms’ financial performance in two groups of European countries which suffered the consequences of the 2008 crisis differently.
Purpose – The purpose of this paper is to analyze business model (BM) and intellectual capital (IC) of a firm
with a focus on their common elements. The common bases in the field of strategic management for these two
concepts are, among others, resource-based view, knowledge-based view, intellectual capital-based view,
dynamic capabilities, and configurational approach. It indicates areas in which these two concepts can benefit
from each other, e.g. in classification of components, their configuration, or dynamic approach. This general
review examines the following research questions: What are the common concepts for the BM and IC? What
are their common components? What does the dynamic approach to IC and BM mean?
Design/methodology/approach – The Web of ScienceTM Q1 Core Collection database was used for the period
Q2 1975-2014 and the Scopus®(Elsevier) search covered the years 1985-2015. These databases were selected because
they offer a reliable overview of historical data regarding journals, articles, and citation impact. The key filter
criteria were the presence of the phrases “business model” or “intellectual capital” in the article title, abstract, and
key words in order to narrow down the selection to the most appropriate results for the research area.
Findings – This paper investigates two concepts from the point of view of their underpinnings in
management, definitions, and components, as well as value creation. Analysis of the foundations
in management allows the author to present a cohesive model, which depicts a comprehensive approach to
analysis of these two concepts. Many common elements have been identified and investigated.
Originality/value – First, it provides an indication of the common underpinnings of the analyzed concepts
within the framework of strategic management and proposals for their development toward resource,
knowledge, and IC accumulation, combination and heterogeneity-based views. Second, it presents an analysis
of the BM and IC components, showing common elements between them. Third, it provides a description and
analysis of dynamic view of BM and IC components in a value creation context.
Keywords Value creation, Business model, Intellectual capital, Components
Paper type General review
Due to the transition from a manufacturing-based to a knowledge-based economy, the relevance of intellectual capital (IC) in firm value creation processes has significantly increased. Considering that traditional financial disclosures do not contain IC-related information, various stakeholders have long asked companies to voluntarily disclose their intellectual resources for those to be incorporated into firm performance considerations and valuations. The advent of integrated reporting provides managers with an innovative tool to address IC disclosure. Nevertheless, despite research already focused on IC information in integrated reporting, knowledge regarding the benefits that companies enjoy through divulging IC-related information in integrated reports remains limited. To fill this gap, this study empirically analyses the impact of IC disclosure quality on firm value in the context of integrated reporting. Based on a sample of 110 companies, findings suggest a significantly positive relationship between all three components of IC (structural, human, social and relationship) and firm value, generating multiple implications for reporting entities, investors, regulators, and managers.
The resource-based theory states that having valuable, rare, inimitable, non-substitutable, and organized (VRIN-O) resources and capabilities give firms a sustainable performance. However, by integrating the attention-based view, we raise a question as to why VRIN-O resources alone are not sufficient for sustainable performance. We introduce the variable-decision-makers' attention-as a key moderator in achieving sustainable performance so that VRIN-O/capability and capability/resource heterogeneity may last longer. To test this relationship, we examine how the needs of firms to balance their exploration and exploitation efforts, called relative exploration anchored to resource-based theory is influenced by CEO's attention towards entrepreneurial orientation and market orientation as moderators. Using a panel data set of 269 firms listed on the Nordic NASDAQ stock exchange, we find an inverted U-shaped relationship between relative exploration and long-term performance, while the attentions of the CEO have a positive moderation effect. Thus, using the attention-based view complements the resource-based theory in explaining sustainable competitive advantage especially in the dynamic environment.
Big data analytics capability can reshape competitive advantages for a service system. However, little is known about how to develop and operationalize a service system analytics capability (SSAC) model. Drawing on the resource based view (RBV), dynamic capability theory (DCT) and the emerging literature on big data analytics, this study develops and validates an SSAC model and frames its impact on competitive advantages using a thematic analysis, delphi studies (n=35) and a survey (n=251) . The main findings illuminate the varying importance of three primary dimensions (i.e., service system analytics management capability, technology capability and personnel capability) and various respective subdimensions (i.e., service system planning, investment, coordination, control, connectivity, compatibility, modularity, technology management knowledge, technical knowledge, business knowledge and relationship knowledge) in developing overall analytics capabilities for a service system. The findings also confirm the strong mediating effects of three dynamic capabilities (i.e., market sensing, seizing and reconfiguring) in establishing competitive advantages. We critically discuss the implications of our findings for theory, methods and practice with limitations and future research directions.
To highlight the importance of intellectual property, the authors first introduce an integrated moderated mediation model to explore the relationships between intellectual capital (relational, organizational and human capital), brand equity (perceived quality, brand awareness, brand loyalty, and brand image) and social capital, in turn providing valuable guidance on hospitality industry management and empirical evidence for China's hospitality sector. As expected, interrelationships of intellectual capital exist, and relational capital may influence human capital through organizational capital. Additionally, the authors continue to expand on the concept of managerial ties and find a moderating effect of business and government ties. We in turn contribute to the theoretical development of intellectual capital, brand equity and social networks. The authors also discuss how this intriguing pattern of the moderated mediation model can be explained by brand equity and intellectual capital theory and can serve as inspiration for hotel managers.
Purpose
The question of whether intellectual capital (IC) is beneficial to firm performance is debatable because of the diverse effects of IC and its components on firm performance. Building on the concept of pay–performance relation, this study aims to provide new insights into how changes in IC affect changes in firm performance.
Design/methodology/approach
Data envelopment analysis is employed to measure firm performance, and value-added intellectual coefficient (VAIC™) is selected to evaluate the IC and its components, namely human capital efficiency (HCE), structural capital efficiency (SCE), and capital employed efficiency (CEE). Ordinary least squares regression is applied to study the relationship between changes in IC and changes in firm performance using 6,408 firm-year observations of electronics companies listed in Taiwan from 2006 to 2017.
Findings
Empirical results suggest that IC efficiency and CEE significantly and negatively affect firm performance, thereby suggesting a contradictory common sense with the resource-based view on the beneficial effects of IC. However, changes in IC efficiency and HCE are significantly and positively related to changes in firm performance, including changes in firm efficiency and sales growth.
Practical implications
This study suggests that managers should continuously pay attention to adjusting their IC, especially human capital (HC) for better decisions that help grow firm performance. Moreover, investors can grasp how sensitive firm performance is to IC.
Originality/value
This study argues the relationship between IC and firm performance in the same vein as a pay-for-performance link, suggesting that future studies should account for increases or decreases in IC.
Purpose
The purpose of this paper is to empirically investigate the effect of intellectual capital (IC) efficiency on changes in the productivity of insurance companies in Ghana.
Design/methodology/approach
Using a panel of 33 insurance companies from 2008 to 2016, the study applied Value Added Intellectual Coefficients model as a measure of IC efficiency, whilst Malmquist Productivity Index is employed to capture changes in the productivity of insurance companies. In estimating the effects of IC on productivity, System Generalised Method of Moment (GMM) is applied because of its power over endogeneity and heteroscedasticity.
Findings
Robust empirical findings on productivity analysis showed that improvements in insurer’s productivity were experienced in three year intervals out of the overall studied year. In addition, panel regression results revealed that IC along with human capital and capital employed significantly affect the productivity of insurance companies.
Research limitations/implications
The generalisability of the study findings could be questioned because it is limited to insurance firms operating in Ghana; some firms were omitted due to mergers and acquisition that reduced the final sample. Yet, the findings facilitate the validation of IC concept and, hence, informs manager/policy makers on IC utilisation as a source of competitive edge.
Practical implications
Having robust empirical findings, the study expands on the existing literature by unveiling the dynamic nature of IC relationship and productivity. The findings also serve as a benchmark for managers/policymakers in insurance companies to increase the operational efficiency by investing in IC, which will help guarantee improve returns on generated premiums.
Originality/value
Although a few studies have investigated the effect of IC in Ghana, this study is the first to examine the dynamic relationship between IC and changes in productivity in a Ghanaian context.
Purpose
The phenomenon of intellectual capital in the firm has been deeply researched and immensely debated in the management literature in recent years. After three decades of evolution, it has become established as a mature field of research. At this point, a review of its theoretical foundations and current and future evolution provides us with the state of the art of intellectual capital in the firm. The purpose of this paper is to present a quantitative review of the existing literature on intellectual capital in the firm.
Design/methodology/approach
In this paper, the authors present a quantitative review of the existing literature on intellectual capital in the firm. To do so, the authors searched the JCR-SSCI database from 1990 to 2016 and identified 553 citing documents; these were split into three main periods in order to identify the interactions and path dependencies existing between different foundations of research. In addition, areas of current and future research connected with the theoretical foundations were identified. For these purposes, the authors used both co-citation analyses as well as bibliographical coupling.
Findings
In this paper, three main stages of IC evolution have been identified with the main topics and research frames, as well as their path dependencies. Additionally, four main areas of current and future development of IC have been identified: IC measurement, IC in new business models, IC disclosure, and its role in social capital and human resource practices.
Research limitations/implications
The present bibliometric study is a quantitative review of papers published in the Web of Science database.
Originality/value
By its dimensions ‒ broad academic disciplines and longitudinal character ‒ this bibliometric study constitutes a new quantitative review of the IC discipline, both drawing its intellectual evolution in the last decades, and showing current and future research trends in IC and the firm.
This paper examines the effects of intellectual capital (IC) on technical, allocative and cost efficiencies for a panel of 339 commercial banks operating in 31 African countries over the 2005–2015 period. Our findings, which are based on Tobit and one-step system GMM regressions, provide evidence that IC exerts positive effects on bank technical, allocative and cost efficiencies. This finding, when significant, remains the same with the sample divided into various regional panels – East Africa, North Africa, Southern Africa, and West Africa. However, when our measure of IC is divided into its three components, namely human capital, physical capital and structural capital, only human capital is positively related to all the three efficiency measures across the panels. Our results suggest the need for African banks to place emphasis on human capital development.
Purpose
Drawing on the knowledge-based theory of the firm, the purpose of this paper is to examine the relationship between each facet of intellectual capital, productivity and firms’ performance and further investigate, heretofore neglected, a mediating effect of productivity in the relationship between each facet of intellectual capital and firms’ performance.
Design/methodology/approach
Data were garnered with a self-reported questionnaire from 232 firm managers working in various industries: banking, insurance, telecommunications and hotels. Reliability and validity of the instruments were confirmed using confirmatory factor analysis. Prior to hypothesis testing using structural equation modelling, as a caveat, tests for nonresponse bias and common method variance were employed.
Findings
The paper confirmed that intellectual capital is the pièce de résistance and established a strong connection with productivity. The results further disclosed a positive relationship between productivity and firms’ performance. A mediated relationship between individual facets of intellectual capital and firms’ performance through productivity was also affirmed.
Practical implications
Chiefly, the paper underscored the importance of intellectual capital in promoting productivity and firms’ performance. It behoves human resource managers and practitioners to make the organisational arrangements to reinforce intellectual capital thereby boosting the productivity that brings organisations’ success.
Originality/value
Previous studies in the sphere of intellectual capital have unequivocally discounted in establishing relationships between intellectual capital, productivity and firms’ performance. The results of the paper are novel findings, unequivocally contributing to the frontiers of the knowledge-based theory of the firm and conjointly, the paper has made methodological and geographical contributions.
Financial technology (Fintech) services using emerging technology such as the Internet of Things (IoT) is becoming more prevalent. The recent proliferation of the mobile payment sector led by innovative mobile Fintech payment services such as Apple Pay and Samsung Pay is the most important and fastest growing Fintech services from consumers’ perspective. Although businesses have been making efforts to spread the use of the services, security is crucial in the diffusion of the services. Despite the importance, the role of perceived security in continuous intention to use mobile, Fintech services has not yet been investigated in depth. Thus, this study investigates the relationships between perceived security, knowledge regarding the services, confirmation, perceived usefulness, and satisfaction. We propose a research model using an extended post-acceptance model (EPAM) as a theoretical framework in the context of Fintech services. We then validate the model using the data collected from the service users. The analyzed results show that knowledge and perceived security in mobile Fintech services have a significant influence on users’ confirmation and perceived usefulness. However, perceived security does not directly influence users’ satisfaction and continual intention to use. We further find significant relationships among confirmation, perceived usefulness, satisfaction, and continual intention to use of the services. We discuss theoretical and practical contributions of the study.
Purpose
The purpose of this paper is to examine the effect of intellectual capital (IC) on financial performance (FP) for Indian companies listed on the Centre for Monitoring Indian Economy Overall Share Price Index (COSPI).
Design/methodology/approach
Hypotheses were developed according to theories and literature review. Secondary data were collected from Indian companies listed on the COSPI between 2001 and 2016, and the value-added intellectual coefficient (VAIC) of Pulic (2000) was used to measure IC and its components. A dynamic system generalized method of moments (SGMM) estimator was employed to identify the variables that significantly contribute to firm performance.
Findings
Indian listed firms appear to be performing well and efficiently utilizing their IC. Overall, human capital had a major impact on firm productivity during the study period. Furthermore, the empirical analysis showed that structural capital efficiency and capital employed efficiency were equally important contributors to firm’s sales growth and market value. The growing importance of the contribution of IC to value creation was consistently reflected in the FP of these Indian companies.
Practical implications
This study has robust theoretical grounds and employs a validated methodology. The present study extends knowledge of IC among academicians and managers and highlights its contribution to value creation. The findings may help stakeholders and policymakers in developing countries properly reallocate intellectual resources.
Originality/value
This study is the first study to evaluate IC and its relationship with traditional measures of firm performance among Indian listed firms using dynamic SGMM and VAIC models.
Presently the field of entrepreneurship, despite calls for the development of a unique theory, continues to lack a unifying theoretical base that can be used to explain, predict, and empirically examine entrepreneurial phenomena. Within the field of entrepreneurship much of entrepreneurship scholarship is still in the "describing the phenomena" stage, including empirical studies, and using ad hoc theories already in existence from several other fields. The result is that scholars from other disciplines use entrepreneurship as the setting to extend their own theoretical frameworks, but leave little behind that extends entrepreneurship theory. Unless the field of entrepreneurship moves beyond these studies, and entrepreneurship journals require that multidisciplinary work from other areas contributes to the unique conceptual domain of entrepreneurship, the field's legitimacy and distinctive contribution will be at stake.
Abstract
Purpose: For better mapping of the path of Intellectual Capital (IC) research, this article selectively reviews empirical studies of IC published, and identifies theories, components and three dimensions of analysis: national IC (NIC); regional IC (RIC); and organizational IC (OIC).
Design/methodology/approach: The systematic literature review (SLR) subject to analysis is based on empirical studies made between 1960 and 2016, and focuses on three dimensions of analysis: NIC; RIC; and OIC. Four research questions were designed, using the following databases: Web of Science; Scopus; and Google Scholar; for data collection purposes.
Findings: The SLR unveils a multidimensional taxonomy for measuring and classifying the type of IC applicable to the different levels of analysis and provides some recommendations for future studies of NIC, RIC and OIC, by outlining the need for clear definitions of components and measures of IC and identifying strengths, limitations and future research avenues.
Originality/value: In order to fill the gap found in the literature and the non-existence of a study clarifying the multiple dimensions of analysis of IC, this SLR makes a two-fold, original contribution to the literature on management: (i) providing an SLR of the main empirical studies dealing with different units of analysis; and (ii) identifying a multidimensional taxonomy for measuring and classifying the type of IC applicable to the different levels of analysis.
This paper analysed the effect of intellectual capital on small and medium-sized hotel financial performance for the period between 2007 and 2015. Using a sample of 934 Portuguese small and medium-sized hotels, this study adopted the GMM system (1998) estimator, to analyse a dynamic panel data. The findings suggested that intellectual capital components, i.e., human capital, structural capital and relational capital provide a positive impact on hotel financial performance. Human capital and relational capital seemed to be key elements for the success of hotels, being the basis of service quality in the hotel sector. Furthermore, the results showed that human capital and structural capital are capitalised by the establishment and maintenance of long-term relationships with key stakeholders. These findings indicated that the interaction between intellectual capital components enhances the hotel financial performance. Herein, it is highlighted the importance of intellectual capital in small and medium-sized hotel financial performance.
Purpose
The present study attempts to bring together various organisational aspects that have never been collectively investigated before in the strategic management literature. Its main objective is to examine the relationship between ‘strategic orientation’ and ‘firm performance’, in the light of two firm-specific factors (‘distinct manufacturing capabilities’ and ‘organisational structure’). The proposed research model of the present study is built upon the resource-based view (RBV) of the firm and the organisational aspect of the VRIO framework (the ‘O’ from the VRIO model).
Design/methodology/approach
The study proposes a newly developed research model that adopts a four-factor approach, while examining a number of direct and indirect effects. The examination of the proposed research model was made with the use of a newly-developed structured questionnaire that was distributed on a sample of Greek manufacturing companies. Research hypotheses were tested using the “Structural Equation Modelling” (SEM) technique. The present study is explanatory (examines cause and effect relationships), deductive (tests research hypotheses), empirical (collects primary data), and quantitative (analyses quantitative data that were collected using a structured questionnaire).
Findings
The empirical results suggest the coexistence of three distinct categories of effects on ‘firm performance’: (a) strategy or ‘utility’ effects, depending on the content of the implemented strategy, (b) firm-specific effects, depending on the content of the organisational resources and capabilities, and (c) organisational effects, depending on the implemented organisational structure. More specifically, the statistical analysis underlines the significant mediating role of ‘strategic orientation’ and the complementary role of ‘organisational structure’. Finally, empirical results support the argument that “strategy follows structure”.
Research limitations/implications
The use of self-reported scales constitutes an inherent methodological limitation. Moreover, the present study lacks a longitudinal approach; since it provides a static picture of the subject under consideration. Finally, the sample size of 130 manufacturing companies could raise some concerns. Despite that, previous empirical studies of the same field, published in respectable journals, were also based on similar samples.
Practical implications
When examining the total (direct and indirect) effects on ‘firm performance’, it seems that the effect of ‘organisational structure’ is, almost, identical to the effect of ‘distinct manufacturing capabilities’. This implies that ‘organisational structure’ (an imitable capability), has, almost, the same contribution on ‘firm performance’, as the manufacturing capabilities of the organisation (an inimitable capability). Thus, the practical significance of ‘organisational structure’ is being highlighted.
Originality/value
There has been little empirical research concerning the bundle of firm- specific factors that enhance the impact of strategy on business performance. Under the context of the resource-based view (RBV) of the firm, the present study examines the impact of ‘organisational structure’ on the ‘strategy-capabilities-performance’ relationship, something that has not been thoroughly investigated in the strategic management literature. Also, the present study proposes an alternate measure for capturing the concept of business strategy, the so-called factor of ‘strategic orientation’. Finally, the study adopts a “reversed view” in the relationship between structure and strategy. More specifically, it postulates that “strategy follows structure” and not the opposite (“structure follows strategy”). Actually, the empirical data supported that (reversed) view, challenging the traditional approach of Chandler (1962) and calling for additional research on that ongoing dispute.
Purpose
The paper examines individual contribution of intellectual capital elements to competitive advantage. The purpose of this paper is to explore the weight of individual intellectual capital elements in explaining competitive advantage in Uganda’s microfinance industry.
Design/methodology/approach
Hierarchical regression was used because of its capacity to indicate precisely what happens to the model as different predictor variables are introduced.
Findings
This study confirms that the three intellectual capital elements are the strong predictors of competitive advantage and they account for 44 percent of variance in competitive advantage. However, the order of importance of these variables in explaining the variance in competitive advantage in the microfinance industry (basing on their standardized β values) is relational capital, structural capital and human capital.
Research limitations/implications
Only a single research methodological approach was employed and future research through interviews could be undertaken to triangulate the data. Furthermore, the findings from the present study are cross-sectional; future research should be undertaken to examine the longitudinal effects of intellectual capital elements.
Practical implications
The findings can help the management to intensify initiatives to encourage greater understanding and acceptance of the concept of intellectual capital that boosts competitive edge in the industry.
Originality/value
This is the first study that focuses on testing the individual contribution of intellectual capital dimensions to competitive advantage in Uganda’s microfinance institutions.
Drawing on learning theories and the intellectual capital (IC) theory, organizational learning research has discussed the benefits of searching for market opportunities and maintaining a competitive advantage in dynamic environments. To explain organizational performance and survival, the previous literature has focused mainly on what organizations do, but it has failed to address how and what they should do. This study argues that if hotel management is open-minded about exploratory and exploitative learning, it can open the door to capturing opportunity and competitive advantage through increased innovation behavior and human capital accumulation. Further, IC theory has also confirmed that social capital and relational capital will strengthen the relationship between innovation behavior and human capital. This study analyzes data from 595 hotel managers and finds strong support for the proposed hypotheses.
The importance of tourism to Greece, the criticality of the hotel sector to its growth and the relationship between turbulent business environment and sustainability provide the rationale for this study. The target of this paper is to propose a new modus operandi for achieving sustainable business excellence under a turbulent environment. Drawing from the existing literature, a framework is proposed that investigates the relationships between intellectual capital, leadership, services quality, supply chain, hotel impact and strategy. The model was tested using a sample of 84 high class hotels in Greece and analysed with the structural equation modelling. The various factors incorporated in the proposed model were measured using valid scales adapted from previous studies. The results confirm that leadership excellence positively affects intellectual capital. It is also found that intellectual capital has a positive effect on services quality, supply chain, hotel impact and strategy. The implications of the findings and avenues for future research are delineated in the study.
Purpose
The purpose of this paper is to empirically examine the effect of intangible resources, i.e. intellectual capital (IC) on financial performance of 64 Islamic financial institutions (IFIs) operating in 18 different countries for the period 2007-2011, while controlling for firm-specific variables, namely, bank size, level of risk, listing status, and firm complexity.
Design/methodology/approach
The required data to calculate different constituents of IC are derived from Bankscope database. Value Added Intellectual Coefficient (VAIC) methodology devised by Pulic is used to determine the impact of IC on financial performance of IFIs.
Findings
Results indicate a significant positive relationship between VAIC and accounting performance based on return on assets (ROA). The results further indicate a significant positive relationship between accounting performance and capital employed efficiency (CEE) and human capital efficiency (HCE), but no significant relationship with regards to structural capital efficiency. Overall, the results suggest that value creation capability of IFIs is highly influenced by HCE and CEE.
Research limitations/implications
The main limitation of the present study lies in its methodological tool, the VAIC methodology, which has been criticized by some researchers as not really measuring IC. Despite the inherent limitation of the VAIC methodology which relies on secondary data published in annual reports, it is still considered by some researchers as one of the best available tool to measure firms’ IC in the absence of access to detailed internal information on IC.
Practical implications
The findings may serve as a useful input for Islamic bankers in managing their investments in IC within their institutions.
Originality/value
The main contribution of this paper is to use a previously little-studied area, Islamic banking and finance, to identify the effect of intellectual capital on performance.
Taiwan is geographically rather homogenous, but it has undergone different historical developments that have led to a diverse cultural landscape, and it attracts international tourists who seek to experience different cultures and cuisines. This paper examines the effect of intellectual capital (IC) attributed to the overall performance relationships of cultural and creative organizations (CCOs). Based on 434 Taiwanese CCOs and integrating the concepts of the upper social network and IC theories, the findings argue that interrelationships exist among types of intellectual capital. Further, social capital plays a critical mediating role in the relationships between IC and CCO performance. Furthermore, business ties play positive moderating roles, and environmental uncertainty has negative impacts on social capital and CCO performance.