Purpose – Intellectual capital ( IC ) shows a signi? cant turning credence as a worthy subject of academic probe and practical deduction. The intent of this survey is to analyze the impact of IC on? rms’ market value and? nancial public presentation. Design/methodology/approach – The empirical informations were drawn from a panel consisting of 96 Grecian companies listed in the Athens Stock Exchange ( ASE ) . from four different economic sectors. observed over the three-year period of 2006 to 2008.

Assorted arrested development theoretical accounts were examined in order to prove the hypotheses included in the proposed conceptual model. Findingss – Results failed to back up most of the hypotheses ; merely reasoning that there is a statistically signi? cant relationship between human capital ef? ciency and? nancial public presentation. Despite the fact that IC is progressively recognised as an of import strategic plus for sustainable corporate competitory advantage. the consequences of the present survey give rise to assorted statements. unfavorable judgment and farther research on the topic.

Research limitations/implications – The deficiency of available informations for the appropriate analysis. the probe of four sectors of economic activity and the comparatively narrow three-year period for informations aggregation are the chief restrictions of the present survey. Practical deductions – Results proved that. in the Grecian concern context. the development of human resources seems to be one of the most signi? cant factors of economic success. Concentrating on human capital should. therefore. be at the Centre of the companies’ attending.

Originality/value – The present survey combines old methodological analysiss in order to look into certain causal relationships sing the IC of Greek listed companies. The value of the paper is the empirical probe of these relationships in the context of the Grecian economic system and the enrichment of the literature with another paper that follows the value-added rational coef? cient methodological analysis for the measuring of IC. Keywords Intellectual capital. Market value. Fiscal public presentation. Organizations. Greece Paper type Research paper 1.

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Introduction Intellectual capital ( IC ) can be brie? y de? ned as the knowledge-based equity of organisations and has attracted. during the last decennary. a signi? cant sum of practical involvement ( Campisi and Costa. 2008 ; Petty and Guthrie. 2000 ) . Although the importance of IC is invariably increasing. many organisations face jobs with its direction. largely due to measurement dif? culties ( Andrikopoulos. 2005 ; Kim et Al. 2009. Nazari and Herremans. 2007 ) . The increasing spread observed between market value and book value of many companies has drawn attending towards look intoing the value losing from? nancial statements.

Harmonizing to assorted bookmans. IC is considered to be the concealed value that escapes? nancial statements and the 1 that leads organisations to obtain a competitory advantage ( Chen et Al. . 2005 ; Edvinsson and Malone. 1997 ; Lev and Radhakrishnan. 2003 ; Lev and Zarowin. 1999 ; Lev. 2001 ; Ruta. 2009 ; Yang and Lin. 2009 ) . Additionally. it is believed that the restrictions of? nancial statements in exactly explicating? rm value uncover the fact that. presents. the beginning of economic value is the creative activity of IC and no longer the production of material goods ( Chen et Al. . 2005 ) .

The widespread credence of IC as a beginning of competitory advantage led to the development of appropriate methods of measuring. since traditional? nancial tools are non able to capture all of its facets ( Campisi and Costa. 2008 ; Nazari and Herremans. 2007 ) . Pulic ( 2000a. B ) developed the most popular method that measures the ef? ciency of value added by corporate rational ability ( value added rational coef? cient ( VAIC ) ) . VAIC measures the ef? ciency of three types of inputs: physical and? nancial capital. human capital. and structural capital ( Firer and Williams. 2003 ; Montequin et Al.

2006 ; Public. 2000a. B ) . The chief aim of the present survey is to analyze the relationship between IC. market value and? nancial public presentation. The methodological analysis for the measuring of IC was based on the surveies of Firer and Williams ( 2003 ) and Chen et Al. ( 2005 ) . The empirical probe was conducted utilizing informations drawn from a panel consisting of 96 Grecian companies listed in the Athens Stock Exchange ( ASE ) . from four different economic sectors ( period 2006 to 2008 ) .

Furthermore. based on the aforesaid VAIC methodological analysis. the survey. analytically examines the separate effects of capital employed ef? ciency. human capital ef? ciency. and structural capital ef? ciency on market value and? nancial public presentation. The undermentioned subdivision includes a short literature reappraisal refering the chief variables of the survey. In the 3rd and 4th subdivision. the proposed conceptual model and the research methodological analysis are being presented. The consequences. decisions. survey restrictions and future research are discussed in the subdivisions 5. 6 and 7 severally.

2. Literature review Various efforts have been made towards developing a widely accepted de? nition of IC. until most writers? nally agreed on its basic parametric quantities. Klein and Prusak ( 1994 ) contributed to the creative activity of a universal de? nition by de? ning IC as the rational stuff that can be formalised. captured and leveraged to bring forth a higher value plus. In the same vain. Edvinsson and Malone ( 1997 ) de? ned IC as the cognition that can be converted into value. Stewart ( 1997 ) argued that rational resources such as cognition. information and experience. are the tools for making wealth and de? ned IC The impact of rational capital 133 JIC 12. 1 134 as the new wealth of organisations.

Sullivan ( 2000. p. 17 ) de? ned IC as “knowledge that can be converted into pro? ts” . Harmonizing to Edvinsson and Malone ( 1997 ) IC can be besides de? ned as the spread that is observed between a? rm’s book and market value. Besides. Kok ( 2007 ) argued that a method for finding the rational ( intangible ) assets of a company is to compare market to book value. These statements are based on the nature of IC. The rational assets of a company are intangible in nature and. therefore. make non hold a certain form or an appropriate? nancial value.

They are characterised as “hidden assets” . since it is dif? cult to place their part to a? rm and quantify them in a? nancial statement ( Edvinsson. 1997 ; Fincham and Roslender. 2003 ) . The ascertained spread between market and book value that has been highlighted in the bibliography ( Andrikopoulos. 2005 ; Chaminade and Roberts. 2003 ; Fincham and Roslender. 2003 ; Lev and Radhakrishnan. 2003 ; Lev and Zarowin. 1999 ; Lev. 2001 ; Tseng and Goo. 2005 ; Zerenler and Gozlu. 2008 ) can be. hence. attributed to the IC assets that are non recognised in balance sheets ( Chaharbaghi and Cripps. 2006 ; Brennan and Connell. 2000 ) .

The function of IC in? lling the spread between book and market value has brought even wider research attending towards the probe of its nature ( Chen et Al. . 2005 ) . Although there is a assortment of IC de? nitions. largely due to the fact that both knowledge-based and economic-based attacks exist ( Burr and Girardi. 2002 ; Walsh et Al. . 2008 ) . a considerable figure of bookmans and practicians identify three basic constituents of IC ; human capital. structural capital and client ( relational ) capital ( Bontis. 1998 ; Edvinsson. 1997 ; Holton and Yamkovenko. 2008 ; Mavridis and Kyrmizoglou. 2005 ; Ruta. 2009 ;

Tayles et Al. . 2007 ; Yang and Lin. 2009 ; Zerenler and Gozlu. 2008 ; Wall. 2007 ; Walsh et Al. . 2008 ) . The above classification. early manifested itself into the IC literature. led to the development of a method of indirect IC measuring. More speci? cally. Bornemann et Al. ( 1999 ) argued that IC can be measured by the accumulate value of three classs of indexs ; human capital ( cognition. accomplishments ) . structural capital ( databases and organisational construction ) and client capital ( provider and client dealingss ) . The utility and importance of IC indexs was. moreover. highlighted by Brennan and Connell ( 2000 ) .

Furthermore. Sullivan ( 2000 ) supported that the assorted dif? culties that are built-in to the direct measuring of IC can be resolved by utilizing single indexs. The same attack has been supported and utilised by assorted research workers ( Andriessen. 2007 ; Andrikopoulos. 2005 ; Chaminade and Roberts. 2003 ; Montequin et Al. . 2006 ; Tseng and Goo. 2005 ; Wall. 2007 ) . Pulic ( 2000a. B ) developed a convenient method of mensurating IC. He argued that the market value of organisations is created by capital employed and IC. the latter consisting of human and structural capital.

The method Pulic ( 2000a. B ) proposed purposes to supply information about the value creative activity ef? ciency of both touchable ( capital employed ) and intangible ( human and structural capital ) assets of an organisation. This method is named VAIC and is distinguishable because it indirectly measures IC via the measuring of capital employed ef? ciency ( VACA ) . human capital ef? ciency ( VAHU ) . and structural capital ef? ciency ( STVA ) . The higher the VAIC. the better the use of the value creative activity potency of a? rm.

The VAIC attack is being adopted in the present survey. following the methodological model of Firer and Williams ( 2003 ) and Chen et Al. ( 2005 ) . Despite the built-in restrictions of VAIC as a method of mensurating IC ( discussed in a undermentioned subdivision of the paper ) . its simpleness. subjectiveness. dependability and comparison make it an ideal step for the context of the present survey. More speci? cally. harmonizing to Andriessen ( 2004 ) . the usage of VAIC as an index of IC is justi? erectile dysfunction by the suf? cient handiness of the? nancial information that the theoretical account uses as inputs.

Additionally. harmonizing to Schneider ( 1998 ) . the danger of losing path of the chief aim of a survey arises when the processs to roll up and treat the appropriate informations become extremely sophisticated. Taking that into consideration. the simpleness of VAIC offers good services to research workers and. moreover. enables cross-sectional comparings ( Schneider. 1998 ) . Firer and Williams ( 2003 ) . moreover. back up the usage of VAIC. mentioning that other developed theoretical accounts of IC measuring are. largely. customised to? t the pro? lupus erythematosus of a speci? hundred company and. therefore. deficiency generalization chances and have limited comparison.

Finally. harmonizing to Firer and Williams ( 2003 ) . VAIC is argued to be an appropriate IC measuring tool due to the fact that all informations applied in its computation are based on audited information. which is nonsubjective and veri? able. On the? old age of empirical research. many surveies have through empirical observation utilized VAIC as a step of IC. Firer and Williams ( 2003 ) utilised the VAIC attack to mensurate the relationship between IC and traditional steps of corporate public presentation. They used a sample of 75 South African populace traded companies. but the empirical consequences failed to back up any relationship between the three value added ef?

ciency constituents and the three dependant variables ( pro? tability. productiveness and market value ) . Their? ndings revealed that South African companies depend largely on their touchable resources. pay the least importance to structural capital. while on the other manus. the market seems to respond negatively to? rms that concentrate entirely on the sweetening of human assets. Overall. the? ndings of Firer and Williams ( 2003 ) suggest that physical capital in South Africa remains the most signi? cant underlying resource of corporate public presentation. despite attempts to increase the IC base of the state. Chen et Al.

( 2005 ) conducted an empirical probe on the relationship between IC. market value and? nancial public presentation. They used a big sample of Taiwanese listed companies and utilized Pulic’s ( 2000a. B ) VAIC. Their survey underlined the importance of IC in the sweetening of? rm pro? tability and gross growing. The empirical consequences proved that: . investors valuate higher companies with better IC ef? ciency ; and. companies with better IC ef? ciency obtain a higher grade of pro? tability and gross growing in the current and undermentioned old ages.

Chen et Al. ( 2005 ) concluded that IC is so a signi? cant strategic plus. since it is positively related to the? rm’s market value and? nancial public presentation. The VAIC attack. developed by Pulic ( 2000a. B ) . has been. furthermore. adopted in assorted other surveies. largely in those conducted in emerging and developing states. Muhammad and Ismail ( 2009 ) tried to look into the ef? ciency of IC and its public presentation in Malaysian? nancial sectors. based on informations from 18 companies for the twelvemonth 2007. It was found that the banking sector was the one trusting the most on IC. followed by companies of the insurance sector and the securities firm sector.

It was besides found that IC has a positive relationship with company public presentation ( measured by pro? tability and ROA ) . but. on the other manus. it was discovered that in Malaysian The impact of rational capital 135 JIC 12. 1 136? nancial sectors. market value is created more by capital employed ( physical and? nancial ) instead than IC. This last? nding of Muhammad and Ismail ( 2009 ) was consistent with a old survey conducted in the same state over the period 2001 to 2003 ( Goh. 2005 ) . where it was found that Malayan Bankss with satisfactory? nancial public presentation ( measured by traditional economic steps ) had low IC coef? cients.

On another survey conducted in the banking sector of Turkey. Samiloglu ( 2006 ) tried to find whether a signi? cant relationship between VAIC and market to book value ratio truly exists. The writer used informations from the? nancial statements of Bankss listed in the Istanbul Stock Market over the old ages 1998 to 2001. The consequences demonstrated that there was no signi? cant relationship between the dependant variable ( MV/BV ) and the independent variables ( VAIC and its three constituents ) .

Gan and Saleh ( 2008 ) . moreover. examined the relationship between IC and corporate public presentation of technology-intensive? rms listed on Bursa ( Malaysia ) . by look intoing whether value creative activity ef? ciency ( measured by VAIC ) . can be explained by market rating. pro? tability. and productiveness.

Overall. the survey of Gan and Saleh ( 2008 ) concluded that VAIC can explicate pro? tability and productiveness. but fails to explicate market rating. On a similar survey in Taiwan. Shiu ( 2006 ) found a signi? cant positive correlativity between VAIC. pro? tability and market rating and a negative correlativity with productiveness. Tseng and Goo ( 2005 ) . in an empirical survey of Chinese makers. found a positive relationship between IC and corporate value.

Tan et Al. ( 2007 ) used the VAIC methodological analysis to analyze informations from 150 listed companies on the Singapore Stock Exchange. and conclude that: . IC and company public presentation are positively related ; . IC is correlated to future company public presentation ; . the rate of growing of a company’s IC is positively related to the company’s public presentation ; and. the part of IC to company public presentation differs by industry. Appuhami ( 2007 ) investigated the impact of the value creative activity ef? ciency on investors’ capital additions on portions. The writer used informations collected from listed companies in Thailand’s stock market and utilised the VAIC attack.

The empirical research found that? rms’ IC has a signi? cant positive relationship with its investors’ capital additions on portions. In a VAIC survey that was conducted in a traditional Western economic system. Puntillo ( 2009 ) examined the relationship between value creative activity ef? ciency. ? rms’ market rating and? nancial public presentation. by utilizing informations drawn from 21 Bankss enlisted in the Milan Stock Exchange. Italy. Results failed to demo any positive signi? cant association between the studied variables. except from the relation between capital employed ef? ciency ( a constituent of VAIC ) and different steps of? rm’s public presentation.

Finally. in an exploratory survey. Mohiuddin et Al. ( 2006 ) used VAIC to mensurate the IC public presentation of 17 commercial Bankss in Bangladesh for the period 2002 to 2004. Harmonizing to their? ndings. all 17 Bankss of the sample had comparatively higher human capital ef? ciency than other capital ef? ciencies. In one of the really few IC surveies that have been conducted in Greece. Mavridis and Kyrmizoglou ( 2005 ) used information from the banking sector for the period 1996-1999 and concluded that there is a positive correlativity between value added and physical capital. but particularly between value added and human or IC.

Writers make a note connoting that consequences may be over over-positive. due to the fact that the Grecian banking sector was on a signi? cant upward tendency for the period under probe. 3. The conceptual model The present survey introduces a conceptual model that expands on prevues methodological analysiss ( Bontis 1998 ; Bontis et Al. . 2000 ; Chen et Al. . 2005 ; Firer and Williams. 2003 ; Mavridis. 2004 ; Pulic 2000a. B ) and investigates the relationship between IC. market value and? nancial public presentation. The hypotheses of the survey are presented below. 3. 1 IC and market value.

Harmonizing to the traditional accounting patterns the book value of an organisation is entirely calculated from its? nancial statements. The simplistic method of such a computation includes deducting liabilities from the? rm’s entire assets. As a consequence. conservative accounting patterns failed to account one the most of import intangible assets of every organisation: IC ( Sveiby. 2000. 2001 ) .

The gradual debut of the International Accounting Standards ( IAS ) in about every developed and developing state ( except from the USA which is expected to implement the IAS in the following? ve old ages ) forced companies to cipher assets at their existent market value. while giving full de? nition and recognition to all intangibles ( International Financial Reporting Standards. 2008 ) . Despite that. the inability of most companies to follow with the IAS and the signi? cant cost of such an execution. still deteriorate the acknowledgment of the intangible assets of every organisation ( Judge et al. . 2010 ) . The consequence of such a short visual perception is a turning divergency between the market and book value of organisations.

In other words. the market estimates the value of companies with high intangible assets ( IC ) to be signi? buzzword higher that the deliberate book value ( Chen et Al. . 2005 ; Firer and Williams. 2003 ; Riahi-Belkaoui. 2003 ) . Therefore. it is hypothesised that the greater the IC. the higher the ratio of market-to-book value: H1. Companies with greater IC have higher ratios of market-to-book value. The above hypothesis uses VAIC as an aggregative step for corporate rational ability ( IC ) . As stated earlier in the paper. VAIC includes three constituent steps: capital employed ef? ciency ( VACA ) . human capital ef? ciency ( VAHU ) and structural capital ef? ciency ( STVA ) .

Since different signi? cance may be put on each of the three constituents of VAIC. it would be interesting to analyze the separate consequence of each on market-to-book value ratio. Such an probe would increase the explanatory power of the conceptual model and give rise to interesting observations. Therefore. it is hypothesised: H1a. Companies with greater capital employed ef? ciency have higher ratios of market-to-book value. H1b. Companies with greater human capital ef? ciency have higher ratios of market-to-book value. H1c.

Companies with greater structural capital ef? ciency have higher ratios of market-to-book value. The impact of rational capital 137 JIC 12. 1 138 3. 2 IC and? nancial public presentation The impact of IC on? nancial public presentation has non been investigated exhaustively on an empirical degree. either it has led research workers to sold and consentaneous decisions. On a theoretical degree. distinguished writers argue that IC is the value driver of all companies ( Stewart. 1997 ) . that cognition direction is a nucleus organisational issue ( Nonaka and Takeuchi. 1995 ) and that organisational cognition is at the Southern Cross of every sustainable competitory advantage ( Bontis. 1999 ) .

On the other manus. empirical grounds are inconclusive and far from accomplishing a solid scienti? hundred consensus. The survey of Riahi-Belkaoui ( 2003 ) found a positive relationship between IC and? nancial public presentation. while Bontis et Al. ( 2000 ) concluded that. regardless of industry. the development of structural capital has a positive impact on concern public presentation.

On the other manus Firer and Williams ( 2003 ) examined the relationship between IC and traditional steps of? rm public presentation ( ROA. ROE ) and failed to? nd any relationship. while Chen et Al. ( 2005 ) . utilizing the same methodological analysis. concluded that IC has an signi? cant impact on pro? tability. The present paper makes an effort to enrich the IC literature. therefore. hypothesising:

H2. Companies with greater IC have better? nancial public presentation. H2a. Companies with greater capital employed ef? ciency have better? nancial public presentation. H2b. Companies with greater human capital ef? ciency have better? nancial public presentation. H2c. Companies with greater structural capital ef? ciency have better? nancial public presentation. Figure 1 summarises all the above hypotheses. therefore. showing the proposed conceptual model of the survey.

Figure 1. The conceptual model of the survey 4. Research methodological analysis 4. 1 Sample and informations choice The? nal sample of the present survey consists of 96 Grecian companies listed in the ASE. These companies belong to four economic sectors ( harmonizing to of? cial sector classi? cation ) : Construction and Materials ( 20 companies ) . Industrial Goods and Services ( 23 ) . Food and Beverage ( 19 ) and Personal and Household Goods ( 34 companies ) . The selected informations cover a period of three old ages. from 2006 to 2008. All four sectors are knowledge based and have a signi? cant importance to the Grecian economic system.

The initial mark of the survey was to pull informations from all companies listed in the Athens Stock Exchange ( about 280 companies with changeless engagement in the ASE for the three-year scrutiny period ) . However. the? rst showing of informations handiness demonstrated that such an enterprise was excessively ambitious. The 2nd informations testing led in the exclusion of many companies. go forthing the sample with merely 119 companies with suf? cient available informations. Finally. 23 more companies were excluded from the sample after the 3rd and most item informations showing.

The high grade of excluded companies re? ects the hapless degree of coverage of Greek listed companies. More exactly. the bulk of the excluded companies provided insuf? cient informations in more that two variables. Overall. the? nal sample ( 96 companies ) represents the 34. 2 per cent of the entire figure of listed companies in the ASE for the twelvemonth 2010. 4. 2 Variable de? nition 4. 2. 1 Independent variables. The present survey includes four independent variables ( Pulic 2000a. B ) : ( 1 ) VACA. index of value added ef? ciency of capital employed. ( 2 ) VAHU. index of value added ef? ciency of human capital. ( 3 ) STVA. index of value added ef? ciency of structural capital.

( 4 ) VAIC. the composite amount of the three separate indexs. The? rst measure towards the computation of the above variables is to cipher value added ( VA ) . VA is calculated harmonizing to the methodological analysis proposed by Riahi-Belkaoui ( 2003 ) . Second. capital employed ( CE ) . human capital ( HU ) and structural capital ( SC ) are being calculated: CE? Total assets* 2 intangible assets HU? Entire investing on employees? salary ; rewards ; etc: ? SC? VA 2 HU: ( * In Greece. wages are calculated in the pro? T and loss ( P & A ; L ) statement. therefore. are already included in entire assets. ) Finally. VAIC and its three constituents are being calculated: VACA?

VA=CE The impact of rational capital 139 JIC 12. 1 VAHU? VA=HU STVA? SC=VA 140 VAIC? VACA? VAHU? STVA: The usage of the above measuring methodological analysis is argued to supply certain advantages ( Bontis. 1999 ; Chen et al. 2005 ; Firer and Williams. 2003 ; Pulic and Bornemann. 1999 ; Roos et Al. . 1997 ; Sullivan. 2000 ) : . It is easy to cipher. . It is consistent. . It provides standardized steps. therefore. leting comparing between industries and states. . Datas are provided by? nancial statements that are more dependable than questionnaires. since they are normally audited by professional public comptrollers. 4. 2.

2 Dependent variables. The present survey includes two dependent variables: ( 1 ) Market-to-book value ratios. ( 2 ) Financial public presentation. The market-to-book value ratio is merely calculated by spliting the market value ( MV ) with the book value ( BV ) of common stocks: MV? Number of portions? Stock monetary value at the terminal of the twelvemonth: BV* ? Stockholders’ equity 2 Paid in capital of preferable stocks: ( *In all instances that good will was included in the book value of a company of the sample. the needed minus was conducted. ) The? nancial public presentation is measured with the usage of three indexs: ( 1 ) Tax return on equity ( ROE ) :

ROE? Net Income=Shareholder’s Equity: ROE measures an organisations pro? tability by uncovering how much pro? t a company generates with the money stockholders have invested. ( 2 ) Tax return on assets ( ROA ) : ROA? Net Income=Total Assets: ROA is an index of how pro? tabular array a company is in relation to its entire assets. It gives an thought as to how ef? cient the direction uses assets to bring forth net incomes. The impact of rational capital ( 3 ) Growth grosss ( GR ) : AA A A GR? Currentyear’ srevenues=Lastyear’ srevenues 2 1? 100 % : GR is the most traditional step that indicates the growing of an organisation.

4. 3 Regression theoretical accounts In order to analyze the hypotheses of the survey. assorted arrested development theoretical accounts have been evaluated. Models 1 and 2 examine the relationship between VAIC and market-to-book value ratio. and VACA. VAHU and STVA and market-to-book value ratio: H 1: M=B? a0? a1 VAIC? vitamin E? 1? H 1a ; H 1b and H 1c: M=B? a0? a1 VACA? a2 VAHU? a3 STVA? vitamin E: ? 2? Regression theoretical accounts 3a to 4c examine the relationship between VAIC and? nancial public presentation ( ROE. ROA. GR ) . and VACA. VAHU and STVA and? nancial public presentation ( ROE. ROA. GR ) : H 2: Roe? a0? a1 VAIC? vitamin E? 3a? H 2: ROA? b0? b1 VAIC? vitamin E? 3b? H 2: GR? c0? c1 VAIC? vitamin E? 3c? H 2a ;

H 2b and H 2c: Roe? a0? a1 VACA? a2 VAHU? a3 STVA? vitamin E? 4a? H 2a ; H 2b and H 2c: ROA? b0? b1 VACA? b2 VAHU? b3 STVA? vitamin E? 4b? H 2a ; H 2b and H 2c: GR? c0? c1 VACA? c2 VAHU? c3 STVA? vitamin E: ? 4c? 5. Consequences 5. 1 Descriptive statistics and correlativity analysis Table I presents the descriptive statistics for all survey variables. The market-to-book value ratio ( 1. 694 ) indicates that 40. 96 per cent of the? rms’ market value is non re? ected on? nancial statements: A AA A Hidden Value? 1:694 2 1:000? =1:694 *100? 40:96 per cent: 141.

JIC 12. 1 142 This? nding supports previews empirical research that has underlined the being of an increasing spread between market and book value of organisations ( Lev and Radhakrishnan. 2003 ; Lev and Zarowin. 1999 ; Lev. 2001 ) . More speci? cally. Lev ( 2001 ) conducted a longitudinal research in the US market ( 1977-2001 ) and concluded that about 80 per cent of corporate market value is omitted from? nancial statements. while this per centum seems to be on an upward tendency.

The correlativity analysis provides an initial prevue of the consequences. reasoning that market-to-book value is signi? cantly related merely with one of the three constituents of VAIC ; human capital ef? ciency. All other correlativity indexes ( M/B correlated with VAIC. VACA STVA ) were non found to be statistically signi? buzzword ( Table II ) . 5. 2 Hypotheses veri? cation Table III presents the consequences sing H1 ( Model 1 ) and Table IV the consequences sing H1a-H1c ( Model 2 ) .

As seen in Table III. the explanatory power of Model 1 is minimum and. moreover. all statistical indexes fail to follow with the usual criterions. Therefore. the empirical consequences fail to back up H1. Furthermore. consequences depicted on Table IV give merely support to H1b. since the signi? cance indices for the other two independent variables are besides unequal ( P. 0:05 ) .

Variable Table II. Correlation analysis for selected survey variables Standard divergence Minimum Maximum M/B VAIC VACA VAHU STVA ROE ROA GR 1. 694 4. 052 0. 069 3. 364 0. 619 1. 211 1. 123 8. 311 1. 862 2. 555 0. 042 2. 364 0. 341 3. 148 2. 333 37. 318 0. 123 2 15. 631 2 0. 092 2 16. 369 2 0. 837 2 15. 689 2 4. 361 2 36. 145 7. 365 25. 148 0. 236 24. 342 2. 496 9. 361 5. 314 269. 329 Variable Table I. Descriptive statistics for all survey variables Mean M/B VAIC VACA VAHU STVA 1. 000 0. 136 0. 369 0. 269 * 0. 029 1. 000 0. 514 * 0. 789 * 2 0. 013 * .

1. 000 0. 369 * 2 0. 129 1. 000 20. 236 1. 000 M/B VAIC VACA VAHU STVA Note: *Correlation signi? buzzword at the 0. 01 degree ( two-tailed ) Independent variable Table III. Regression consequences – Model 1: M/B and VAIC Coef? cient t-statistic Signi? cance Constant VAIC 2 1. 971. 535 20. 021 20. 495 20. 164 0. 622 0. 870 Notes: Adjusted R 2? 0. 000 ; F-value? 99. 36 ( p-value. 0. 05 ) The empirical probe failed to back up the hypothesis that investors place higher value on? rms with greater IC ( VAIC ) . However. it seems that investors take merely the human capital of a company into consideration when they estimate its existent value.

Therefore. consequences clearly indicate that investors place different value on each of the three constituents of VAIC. since human capital ef? ciency is treated otherwise that the other two constituents ( capital employed ef? ciency and structural capital ef? ciency ) .

Finally. it should be pointed out that the statistical analysis produced the same consequences. even when each of the four sectors was individually analysed. Table V presents the consequences sing H2 ( Model 3 ) and Table VI the consequences sing H2a-H2c ( Model 4 ) . Consequences in Table V demonstrate that there is no signi? cant relationship between IC ( measured with VAIC ) and the three? nancial public presentation steps ( ROE. ROA. GR ) . since all coef? cients or theoretical account solutions are statistically insigni? buzzword. Therefore. H2 is non supported by the empirical informations.

Furthermore. consequences depicted in Table VI indicate that the lone statistically signi? cant Independent variables Coef? cient t-statistic 23. 457. 817 0. 003 0. 126 20. 022 2 0. 706 0. 025 0. 325 2 0. 165 0. 483 0. 369 0. 032 0. 645 143 Signi? cance Constant VACA VAHU STVA The impact of rational capital Notes: Adjusted R 2? 0. 114 ; F-value? 63. 14 ( p-value. 0. 05 ) .

Independent variable ROE Coef? cient t-statistic Constant VAIC Adjusted R 2 F-value 1. 907. 369 0. 095 0. 095 2. 653 2. 948 * 0. 743 Dependent variables ROA Coef? cient t-statistic 2. 253. 304 0. 062 0. 004 3. 698 2. 423 * 0. 498 GR Coef? cient t-statistic 7. 124. 459 0. 019 0. 000 34. 652 1. 005 0. 153 Note: *Signi? buzzword at the 0. 05 degree Independent variables ROE Coef? cient t-statistic Constant VACA VAHU STVA Adjusted R 2 F-value 3. 392. 369 0. 009 0. 432 0. 085 0. 189 4. 698 * Note: *Signi? buzzword at the 0. 05 degree 4. 689 * 0. 077 3. 627 * 0. 726 Dependent variables ROA Coef? cient t-statistic 2. 555. 276 0. 056 0. 054.

0. 041 0. 009 21. 448 2. 276 * 0. 439 0. 416 0. 322 Table IV. Regression consequences – Model 2: M/B and VAICs constituents Table V. Regression consequences – Model 3: ? nancial public presentation and VAIC GR Coef? cient t-statistic 6. 881. 598 0. 021 20. 025 0. 022 0. 002 9. 367 0. 890 0. 161 2 0. 190 0. 171 Table VI. Regression consequences – Model 4: Fiscal Performance and VAICs constituents JIC 12. 1 144 relationship is the 1 between human capital ef? ciency ( VAHU ) and ROE. All other investigated theoretical accounts are statistically insigni? buzzword. Therefore. H2b and H2c are non supported by the empirical informations. while H2a is partly supported.

The above consequences did non dramatically changed. even after each of the four sectors included in the survey was individually analysed. The consequences of the present survey offer the bibliography another paper that fails to to the full back up the importance of IC ( measured under the VAIC methodological analysis ) . In general. the empirical surveies that have used the VAIC attack in order to look into the impact of IC on assorted concern variables have concluded on contradictory consequences. For illustration. Firer and Williams ( 2003 ) . in a survey conducted on South Africa. failed to place a relationship between.

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