The Influence of the Intellectual Capital on the Firms’ Market Value: A Study of Listed Firms in the Tehran Stock Exchange (TSE)
Intellectual capital is one of the most valuable and
important parts of the intangible assets of enterprises especially in
knowledge-based enterprises. With respect to increasing gap between
the market value and the book value of the companies, intellectual
capital is one of the components that can be placed in this gap. This
paper uses the value added efficiency of the three components,
capital employed, human capital and structural capital, to measure the
intellectual capital efficiency of Iranian industries groups, listed in
the Tehran Stock Exchange (TSE), using a 8 years period data set
from 2005 to 2012. In order to analyze the effect of intellectual
capital on the market-to-book value ratio of the companies, the data
set was divided into 10 industries, Banking, Pharmaceutical, Metals
& Mineral Nonmetallic, Food, Computer, Building, Investments,
Chemical, Cement and Automotive, and the panel data method was
applied to estimating pooled OLS. The results exhibited that value
added of capital employed has a positive significant relation with
increasing market value in the industries, Banking, Metals & Mineral
Nonmetallic, Food, Computer, Chemical and Cement, and also,
showed that value added efficiency of structural capital has a positive
significant relation with increasing market value in the Banking,
Pharmaceutical and Computer industries groups. The results of the
value added showed a negative relation with the Banking and
Pharmaceutical industries groups and a positive relation with
computer and Automotive industries groups. Among the studied
industries, computer industry has placed the widest gap between the
market value and book value in its intellectual capital.
[1] Abdulsalam, F., Al-Qaheri, H., and Al-Khayyat, R. “The Intellectual
Capital Performance of Kuwaiti Banks: An Application of VAIC™
Model”, iBusiness, 2011, Vol. 3, pp. 88-96
[2] Andrikopoulos, A. “The real-options approach to intellectual capital
analysis: a critique”, Knowledge & Process Management, 2005, Vol. 12
No. 3, pp. 217-24.
[3] Appuhami, B.A.R., “The impact of intellectual capital on investors’
capital gains on shares: an empirical investigation of Thai banking,
finance and insurance sector”, International Management Review, 2007,
Vol. 3 No. 2, pp. 14-25.
[4] Baltagi, B.H. “Econometric Analysis of Panel Data”, second ed. John
Wiley and Sons Ltd, Chicester. 2001.
[5] Burr, R. and Girardi, A. “Intellectual capital: more than the interaction
of competence commitment”, Australian Journal of Management, 2002,
Vol. 27, special issue, pp. 77-87
[6] Chaharbaghi, K. and Cripps, S. “Intellectual capital: direction, not blind
faith”, Journal of Intellectual Capital, 2006, Vol. 7 No. 1, pp. 29-32.
[7] Chen, M.C., Cheng, S.J. and Hwang, Y. “An empirical investigation of
the relationship between intellectual capital and firms’ market value and
financial performance”, Journal of Intellectual Capital, 2005, Vol. 6 No.
2, pp. 159-76.
[8] Edvinsson, L. “Developing intellectual capital at Skandia”, Long Range
Planning, 1997, Vol. 30 No. 3, pp. 366-73.
[9] Edvinsson, L. and Malone, M.S. “Intellectual Capital: Realizing Your
Company’s True Value by Finding Its Hidden Brainpower”, Harper
Business, New York, NY. 1997.
[10] Hsiao, C., 1986. “Analysis of Panel Data”. Cambridge University Press,
Cambridge, New York.
[11] Klein, D.A. and Prusak, L. “Characterizing Intellectual Capital”, Ernst &
Young, Cambridge. 1994.
[12] Kok, A. “Intellectual capital management as part of knowledge
management initiatives at institutions of higher learning”, The Electronic
Journal of Knowledge Management, 2007, Vol. 5 No. 2, pp. 181-92.
[13] Mohiuddin, M., Najibullah, S. and Shahid, A.I. “An exploratory study
on intellectual capital performance of the commercial banks in
Bangladesh”, The Cost and Management, 2006, Vol. 34 No. 6, pp. 40-
54.
[14] Petty, R., Guthrie, J., Ricceri, F. “The voluntary reporting of intellectual
capital: comparing evidence from Hong Kong and Australia”. Journal of
Intellectual Capital, 2006, 7 (2), 254e271.
[15] Samiloglu, A.T. “The performance analysis of the Turkish banks
through VAIC and MV/MB ratio”, Journal of Administrative Sciences,
2006, Vol. 4 No. 1, pp. 207-26.
[16] Stewart, T. A. “Brainpower: How intellectual capital is becoming
America’s most valuable asset”. Fortune, 1991, 44–60.
[17] Stewart, T. A. “Intellectual capital: The new wealth of organizations”.
New York: Doubleday Dell Publishing Group. 1997.
[18] Sveiby, K.E., “The new annual report” (translated from Swedish: Den
Nya Arsredovisingen). 1988, <http://www.sveiby.com.au>.
[19] Sveiby, K.E. “The New Organizational Wealth: Managing and
Measuring Knowledge-Based Assets”. Berrett-Kohler, San Francisco,
CA. 1997.
[20] Sveiby, K.E. “Methods for Measuring Intangible Assets”. 2002,
<http://www.sveiby.com/Portals/0/articles/IntangibleMethods.htm>
(accessed 01.10.06.).
[21] Tseng, C. and Goo, Y.J. “Intellectual capital and corporate value in an
emerging economy: empirical studies of Taiwanese manufacturers”,
R&D Management, 2005, Vol. 35 No. 2, pp. 187-201.
[22] Zerenler, M. and Gozlu, S. “Impact of intellectual capital on exportation
performance: research on the Turkish automotive supplier”, Journal of
Transnational Management, 2008, Vol. 13 No. 4, pp. 318-41.
[23] Firer, S. & Williams, S. “Intellectual capital and traditional measures of
corporate performance”, Journal of Intellectual Capital , 2003, Vol. 4(3),
348-360.
[24] Pulic, A. “Measuring the performance of intellectual potential in
knowledge economy”, paper presented at the 2nd World Congress on
Measuring and Managing Intellectual Capital , McMaster University,
Hamilton. 1998.
[25] Pulic, A. “VAIC™ – an accounting tool for IC management”,
International Journal of Technology Management, 2000a, 20 (5-8), 702-
714.
[26] Pulic, A. “MVA and VAIC Analysis of Randomly Selected Companies
from FTSE 250”, 2000b.
[27] Riahi-Belkaoui, “A. Intellectual Capital and Firm Performance of US
Multinational Firms: A Study of the Resource-based and Stakeholder
Views”, Journal of Intellectual Capital, 2003, 4 (2), pp. 215-226.
[28] Schneider, U. “The Austrian approach to the measurement of intellectual
potential”, 1998, paper presented at the National Business Conference,
Hamilton.
[1] Abdulsalam, F., Al-Qaheri, H., and Al-Khayyat, R. “The Intellectual
Capital Performance of Kuwaiti Banks: An Application of VAIC™
Model”, iBusiness, 2011, Vol. 3, pp. 88-96
[2] Andrikopoulos, A. “The real-options approach to intellectual capital
analysis: a critique”, Knowledge & Process Management, 2005, Vol. 12
No. 3, pp. 217-24.
[3] Appuhami, B.A.R., “The impact of intellectual capital on investors’
capital gains on shares: an empirical investigation of Thai banking,
finance and insurance sector”, International Management Review, 2007,
Vol. 3 No. 2, pp. 14-25.
[4] Baltagi, B.H. “Econometric Analysis of Panel Data”, second ed. John
Wiley and Sons Ltd, Chicester. 2001.
[5] Burr, R. and Girardi, A. “Intellectual capital: more than the interaction
of competence commitment”, Australian Journal of Management, 2002,
Vol. 27, special issue, pp. 77-87
[6] Chaharbaghi, K. and Cripps, S. “Intellectual capital: direction, not blind
faith”, Journal of Intellectual Capital, 2006, Vol. 7 No. 1, pp. 29-32.
[7] Chen, M.C., Cheng, S.J. and Hwang, Y. “An empirical investigation of
the relationship between intellectual capital and firms’ market value and
financial performance”, Journal of Intellectual Capital, 2005, Vol. 6 No.
2, pp. 159-76.
[8] Edvinsson, L. “Developing intellectual capital at Skandia”, Long Range
Planning, 1997, Vol. 30 No. 3, pp. 366-73.
[9] Edvinsson, L. and Malone, M.S. “Intellectual Capital: Realizing Your
Company’s True Value by Finding Its Hidden Brainpower”, Harper
Business, New York, NY. 1997.
[10] Hsiao, C., 1986. “Analysis of Panel Data”. Cambridge University Press,
Cambridge, New York.
[11] Klein, D.A. and Prusak, L. “Characterizing Intellectual Capital”, Ernst &
Young, Cambridge. 1994.
[12] Kok, A. “Intellectual capital management as part of knowledge
management initiatives at institutions of higher learning”, The Electronic
Journal of Knowledge Management, 2007, Vol. 5 No. 2, pp. 181-92.
[13] Mohiuddin, M., Najibullah, S. and Shahid, A.I. “An exploratory study
on intellectual capital performance of the commercial banks in
Bangladesh”, The Cost and Management, 2006, Vol. 34 No. 6, pp. 40-
54.
[14] Petty, R., Guthrie, J., Ricceri, F. “The voluntary reporting of intellectual
capital: comparing evidence from Hong Kong and Australia”. Journal of
Intellectual Capital, 2006, 7 (2), 254e271.
[15] Samiloglu, A.T. “The performance analysis of the Turkish banks
through VAIC and MV/MB ratio”, Journal of Administrative Sciences,
2006, Vol. 4 No. 1, pp. 207-26.
[16] Stewart, T. A. “Brainpower: How intellectual capital is becoming
America’s most valuable asset”. Fortune, 1991, 44–60.
[17] Stewart, T. A. “Intellectual capital: The new wealth of organizations”.
New York: Doubleday Dell Publishing Group. 1997.
[18] Sveiby, K.E., “The new annual report” (translated from Swedish: Den
Nya Arsredovisingen). 1988, <http://www.sveiby.com.au>.
[19] Sveiby, K.E. “The New Organizational Wealth: Managing and
Measuring Knowledge-Based Assets”. Berrett-Kohler, San Francisco,
CA. 1997.
[20] Sveiby, K.E. “Methods for Measuring Intangible Assets”. 2002,
<http://www.sveiby.com/Portals/0/articles/IntangibleMethods.htm>
(accessed 01.10.06.).
[21] Tseng, C. and Goo, Y.J. “Intellectual capital and corporate value in an
emerging economy: empirical studies of Taiwanese manufacturers”,
R&D Management, 2005, Vol. 35 No. 2, pp. 187-201.
[22] Zerenler, M. and Gozlu, S. “Impact of intellectual capital on exportation
performance: research on the Turkish automotive supplier”, Journal of
Transnational Management, 2008, Vol. 13 No. 4, pp. 318-41.
[23] Firer, S. & Williams, S. “Intellectual capital and traditional measures of
corporate performance”, Journal of Intellectual Capital , 2003, Vol. 4(3),
348-360.
[24] Pulic, A. “Measuring the performance of intellectual potential in
knowledge economy”, paper presented at the 2nd World Congress on
Measuring and Managing Intellectual Capital , McMaster University,
Hamilton. 1998.
[25] Pulic, A. “VAIC™ – an accounting tool for IC management”,
International Journal of Technology Management, 2000a, 20 (5-8), 702-
714.
[26] Pulic, A. “MVA and VAIC Analysis of Randomly Selected Companies
from FTSE 250”, 2000b.
[27] Riahi-Belkaoui, “A. Intellectual Capital and Firm Performance of US
Multinational Firms: A Study of the Resource-based and Stakeholder
Views”, Journal of Intellectual Capital, 2003, 4 (2), pp. 215-226.
[28] Schneider, U. “The Austrian approach to the measurement of intellectual
potential”, 1998, paper presented at the National Business Conference,
Hamilton.
@article{"International Journal of Business, Human and Social Sciences:71908", author = "Bita Mashayekhi and Seyed Meisam Tabatabaie Nasab", title = "The Influence of the Intellectual Capital on the Firms’ Market Value: A Study of Listed Firms in the Tehran Stock Exchange (TSE)", abstract = "Intellectual capital is one of the most valuable and
important parts of the intangible assets of enterprises especially in
knowledge-based enterprises. With respect to increasing gap between
the market value and the book value of the companies, intellectual
capital is one of the components that can be placed in this gap. This
paper uses the value added efficiency of the three components,
capital employed, human capital and structural capital, to measure the
intellectual capital efficiency of Iranian industries groups, listed in
the Tehran Stock Exchange (TSE), using a 8 years period data set
from 2005 to 2012. In order to analyze the effect of intellectual
capital on the market-to-book value ratio of the companies, the data
set was divided into 10 industries, Banking, Pharmaceutical, Metals
& Mineral Nonmetallic, Food, Computer, Building, Investments,
Chemical, Cement and Automotive, and the panel data method was
applied to estimating pooled OLS. The results exhibited that value
added of capital employed has a positive significant relation with
increasing market value in the industries, Banking, Metals & Mineral
Nonmetallic, Food, Computer, Chemical and Cement, and also,
showed that value added efficiency of structural capital has a positive
significant relation with increasing market value in the Banking,
Pharmaceutical and Computer industries groups. The results of the
value added showed a negative relation with the Banking and
Pharmaceutical industries groups and a positive relation with
computer and Automotive industries groups. Among the studied
industries, computer industry has placed the widest gap between the
market value and book value in its intellectual capital.", keywords = "Capital Employed, Human Capital, Intellectual
Capital, Market-to-Book Value, Structural Capital, Value Added
Efficiency.", volume = "10", number = "1", pages = "164-5", }
