Disclosure of Intellectual Capital in Annual Reports: An Empirical Study of the Listed Companies in Bangladesh (Published)
As the world economy is experiencing a transition from industrial to knowledge economy, intellectual capital (IC) has become a prominent feature of business transactions and discourse. Interest in IC and IC disclosure is rising in developed and developing countries. At present, Intellectual Capital Disclosure (ICD) is done voluntarily by very few leading corporations all around the world. Omission of ICD may adversely influence the quality of decisions made by users of accounting information or lead to material misstatements. Hence, rising importance of IC has necessitated insightful studies. With this background in mind, the study of 25 Bangladeshi knowledge based companies listed in Dhaka Stock Exchange (DSE) from Information Technology considered to be highly knowledge intensive has been undertaken in order to find out the disclosure level of recording and reporting of intellectual capital through content analysis of their corporate annual reports. It is evident from the study that level of intellectual capital reporting in the Bangladeshi companies is negligible and intellectual capital reporting has not received any preference or priority for the mentors of these corporations. On the basis the findings, the study recommends national and international accounting regulatory bodies to develop specific and uniform standard on identifying, measuring and reporting IC.
Intellectual Capital Impact on Competitive Advantage Achievement in Jordanian Financial Companies (Published)
This study aims at investigating the impact of intellectual capital on achieving competitive advantage in Jordanian financial companies. The study population consists of all companies operating in financial sector: banks, insurance companies and shareholding companies listed in Amman financial market amounting 100 companies. The researcher used convenient random sample from the said companies amounting 80 companies that is (80%) of the study population. The questionnaire was distributed to HR managers or their representatives in these companies. 80 questionnaires were distributed, 76 questionnaires were collected that is 95% .All questionnaires were valid for analysis, To achieve study objectives a questionnaire was developed to measure intellectual capital dimensions, which are believed to influence competitive advantage achievement in these companies. The study concluded a set of results; the most important is that there is a positive relationship between intellectual capital dimensions with its five variables and achieving competitive advantage in Jordanian financial companies. This confirms the importance of intellectual capital in achieving competitive advantage in these companies. The results also showed that Jordanian financial companies have interest in intellectual capital, since there was sufficient interest in attracting intellectual capital, focusing on customers and activating intellectual capital. The results also showed that these companies have less interest in making intellectual capital and maintain the same. Finally, the study recommended a set of recommendations, the most important of which is the need for top management in Jordanian financial companies to continue paying attention to all intellectual capital dimensions as important variables that contribute to these companies competitive advantage which enhance their position in the market.
This paper appraised the effect of intellectual capital on financial performance of firms in Nigeria using the banking industry. The research used the Value Added Intellectual Coefficient (VAIC) to ascertain the extent that intellectual capital indices affect financial performance of three Nigeria. Data were collected from the published annual financial statements of the three banks and analyzed using regression tool. The study indicates that IC has a positive and significant effect on banks’ financial performances of the banks but some are not significant. The results further showed that the banks are statistically different in both the intellectual capital and its financial performance indicators. It also shows that the banks with high IC also show high financial performance. The study recommends banks in Nigeria invest vigorously in development of their human capital as a key driver of firm’s performance. They should also provide the infrastructures needed for to achieve a virile human capital in the system.
Human Resource Costs and Financial Performance: Evidence from Selected Listed Firms In Nigeria. (Published)
There is general lack of quantification and disclosure of human assets in domestic and international financial reports, and this appears to depress public assessment of the financial performance and value of firms. This study investigated the effect of human resource costs on the financial performance of firms in Nigerian. The specific objective is to determine the extent to which investments in human resources influence profit after tax and turnover of firms in Nigeria. Secondary data on relevant financial variables were extracted from published financial statements of ten selected listed firms in Nigeria. The OLS technique was employed in analyzing the data and the results indicate that personnel benefit costs have positive and significant effect on Profitability, explaining about 73.9% of the variations in Profit After Tax of firms in Nigeria. The results however reveal no significant effect of Personnel Benefit Costs on firm turnover. The paper therefore concludes that investments in human resources have positive trade-off effects on profitability and growth of firms and recommends greater commitment to manpower development and training, while providing proper infrastructures and conducive working environment to enhance the capacity of employees to drive positive improvements in corporate financial performance.
The Role of Intellectual Capital in Achieving Organizational Innovation Study of the Case of “Ain Touta” Cement Company, Algeria (Published)
The study aims to investigate the role of intellectual capital with its three dimensions: (human capital, structural capital and customer capital ) in achieving organizational innovation, by studying the case of “Ain Touta” cement company at the province of Batna in Algeria. To reach this objective, we have designed a questionnaire composed of 30 expressions, and adopted 50 samples of the statistical community consisting in permanent workers at the company. In order to analyze the obtained data, we have used many statistical methods through which the study found a set of results, most notably, the existence of strong correlation and positive impact between intellectual capital with its (three) dimensions and organizational innovation in “Ain Touta” Cement Company, province of Batna, Algeria. The study concluded with a set of recommendations whose the most important are: increasing interest to intellectual capital because it is one of its most valuable assets, as well as the need to tend towards customers by knowing their propositions, listening to their grievances, working to resolve them in order to gain their satisfaction, and developing a relationship with them, in addition to adopting the principle of authority delegating to administrative levels, to let workers gain confidence in their abilities to make decisions and solve their problems
Effect of Intellectual Capital on Corporate Valuation of Quoted Pharmaceutical Firms in Nigeria (Published)
This study examined the effect Intellectual Capital(IC) can affect corporate valuation of firms quoted in Nigeria. The study adopted the Panel Research Design as used Time Series and Cross-Sectional Data. Data covered a ten- year period (2004-2013). Simple Random Sampling was employed in selecting firms for this study. Data were sourced from the firms’ annual financial statements using content analysis approach. Market valuation data were sourced from the Nigerian Stock Exchange. Intellectual Capital(Independent Variable) was measured using Human Capital Efficiency (HCE), Structural Capital Eficiency(SCE) and Capital Employed Efficiency (CEE). Market to Book Value Ratio(M/BV) and Earnings per Share(EPS). The study adopted the Value Added Intellectual Coefficient (VAIC) Model as developed by Pulic(1998) to examine the effect of Intellectual Capital on firms’ values. Multiple Regression Correlation Analysis was used on the data at 5% level of significance. E-View Statistical Tool version 8.0 was used in the analysis. The results reveal that Human Capital Efficiency has a positive and significant effect on Market/Book Value. SCE has a negative and insignificant effect on M/BV; CEE has negative and significant effect on M/BV; positive and insignificant effect on EPS. In view of our findings, the study recommends that companies should invest substantial part of their earnings on human capital via knowledge development as such investments are capable of stimulating the value creation potentials of their staff and can get investors place higher premium on them.
The Behavior of the Managers to Human Resources as a Factor in Building a Good Organizational Climate (Published)
The modern working conditions with the application of a number of daily changes that create conditions for growth and development of the organization, imply the need for “healthy” organizational climate that is characterized by motivated employees that consider their jobs as a challenge rather than as a process which tires you and is seen as an obligation. Treating the human resources by managers as intellectual capital, which is the organizational wealth by which the organization develops its competitiveness in the market, is the dominant factor based on which is built the sense of total commitment and belonging of the individual in the organization, which is becoming recognizable in the environment by the attitude of the individual towards its work experience as pleasure and not as an imposed obligation that must be realized. This condition can be achieved if the directors have developed managerial, and leadership skills that are necessary condition for building a working climate in which the employee will be treated as a resource that is in the center of the organization.
The Strategic Perspective of Intellectual Capital Accounting and Increased Market Value to Business Organizations in the Knowledge Society (Published)
The importance of this study status enjoyed by the accountant in creating additional positive flows directly, and indirect contribution in rising in the capital markets through the creation of an enabling environment capable of overcoming the problems facing professional activities and services for accountants and insurance company and shareholder requirements efficiently and effectively. This development led to a change in the Outlook for accounting work which was considered a service center because it was limited to logging operations and Fund, and with modern developments have changed the perception of the accounting strategy as a profit center and Given to the accountant of suggestions for alternatives to investment and finance operations and undermine the risk gap as a missed in negotiating with all parties, such as optimization of the advertising side of accounting resulting creation flows additional profit and effective contribution in shaping strategic plans which reflect positively on the market capitalization of the business. The main results of the researcher are: The changing perception of intellectual capital accounting strategic axis produce about profits and flows and actual additions contribute to increasing the market value of the business, and this changed perception of accounting service center to profit center. Successful organizations are able to address the gaps and shortcomings in the efficiency of the accounting staff and see how willing those cadres to deal with sophisticated technologies.
The Relationship between the Financial Performance and Intellectual Capital in the Food and Beverage Enterprises (Published)
Increase in the gap between companies’ market value and their book value has resulted in numerous investigations into identifying the factors eliminated from the financial statements of companies. Intellectual capital value affects the value of companies but is not reflected in financial statements. This research investigated the relationship between financial performance of the companies in food and beverage industry listed in Tehran Stock Exchange and the components of intellectual capital. Accounting profit (loss) was used as a performance indicator. Pulic’s value added intellectual coefficient was used to measure the performance of intellectual capital. Kolmogrov-Smirnov and Mann-Whitney U tests were used to analyze the information about 127 firms-years of 23 active companies in the industry. The results indicated that the communication and human capital efficiency coefficients were higher in profitable companies compared to unprofitable companies. However, structural capital efficiency coefficient was higher in unprofitable companies.
INTELLECTUAL CAPITAL AND RESEARCH PERFORMANCE OF UNIVERSITIES IN SOUTHERN PUNJAB-PAKISTAN (Published)
The main purpose of this study is to examine the concept of Intellectual capital in higher education institutions/universities, justify its importance and its impact on their research output and performance. This study analyzes the impact of Intellectual Capital on university research performance in Pakistani universities and also compares the intellectual capital of two selected universities. This is an important study of the intellectual research area because the growing interest in intellectual capital has been extended from the firms to higher education institutions during the last decade. The major function of a university is exploring and transmitting knowledge which is acquired through research and education. Therefore assessing university research performance and its intellectual capital is a complex and critical issue. Furthermore intellectual capital has become a major driver for sustainable competitive advantage in all the organizations. A literature review is used to describe the intellectual capital, its components and research performance of the universities; it also highlighted the researchers’ contributions in this area of study. The study uses exploratory approach to develop the conceptual model and raised these research questions with respect to it; Is there a significant impact of intellectual capital and its components on research performance of the university?, which university BZU or IUB has the greater intellectual capital. These research questions were investigated through empirical research using a case study approach on two large general public sectors universities of Southern Punjab, Pakistan i.e. IUB and BZU. Secondary data was used and collected for the study. Descriptive, Ratio and correlation analysis were used to study the intellectual capital of the universities and its impact on their research performance. Our descriptive and Ratio analysis found that BZU has higher and positive values in the all indicators of human, structural and relational capital, which shows that BZU has greater intellectual capital then the IUB. The results of these techniques also showed that intellectual capital has a significant impact on research performance of the university in general. According to the findings all the components of intellectual capital also has a significant impact on research performance of the university, although human capital was ranked first and most important, followed by structural capital while relational capital ranked last among the components. Additionally the effect of human capital was most influential whereas relational capital did not have a significant impact. The results of this study are useful for the Universities to understand the value of their intellectual capital and exploit them for innovations and efficiency augmentation.
INTELLECTUAL CAPITALS AND FINANCIAL PERFORMANCE INDICES OF DEPOSIT MONEY BANKS IN NIGERIA: A COMPARATIVE ASSESSMENT (Published)
The emergence of high technology, information, and innovation based environment in the world today has greatly altered the way and manner businesses are done globally. This new technology which of course utilizes high level of intellectual capital also determines the level of financial performance of business organizations. Some organizations which hitherto were rated very high in terms of their profitability and other financial performances are today being rated very low simply because of their non-adoption of this intellectually based technology. This study uses the Value Added Intellectual Coefficient (VAIC) model to compare both the intellectual capital indices as well as the financial performance variables of six highly rated banks in Nigeria with the aim of determining if the deviations in their financial performance indices could be explained by the deviations in the banks’ intellectual capital variables. The study adopted the ex-post facto research design. It was systematically conducted using longitudinal time series data generated from the Nigeria Stock Exchange and from annual reports and accounts of the selected banks in Nigeria spanning from year 2000 to 2012. The study adopted the Duncan Multiple Range Test (DMRT) of ANOVA across the six selected banks in Nigeria for the test of the hypotheses. The SPSS statistical software (version 17.0) was used for the data analysis. From the analyses, it was discovered that there were significant deviations in both the financial performance indicators and in the intellectual capital variables among the six banks studied. The results further showed that the banks are statistically different in both the intellectual capital indices and in the financial performance indicators. The study also established that the banks with high intellectual capital also recorded high financial performance and therefore recommends that all banks should embrace this new intellectually based technology in order to enhance their financial performances, returns to their different stakeholders as well as in their service delivery to their customers.