The idea that competitive advantage is gained through the application of intellectual capital, is a main driver for enbridges participation. Purpose of the study is to measure the intellectual capital through annual activity reports of. Issue 3 2014 managing intellectual capital dimensions for organizational value creation. The measurement of intellectual capital by vaic method.
Nevertheless, other authors are classifying intellectual capital into similar, but not common groups. The impact of intellectual capital on banks market value. Pashar and shachar proposed that the five components of national intellectual capital were human capital, market capital, process capital, renewal capital, and financial capital. Intellectual capital has therefore been used in the study, covering the three main categories of human capital, intellectual assets and intellectual property. Intellectual capital measuring and reporting popups. It concluded that the optimum and efficient use of company resources and intellectual impact on their profitability index. Integrated reporting and intellectual capital concepts and. The firms market value was measured by market to book value mbv. What is essential to make this approach viable is the analysis. An overview of the intellectual capital ic intellectual capital is relatively new topic not only within the accounting and finance discipline but also within the business and management arena. The idea that competitive advantage is gained through the application of intellectual. Measuring intellectual capital became a main research area in the 1990s.
The effect of intellectual capital on organizational. A critical approach on definitions and categorization 58 capital and on the other hand, the book value suffers both the influence of accounting system and international accounting standards. Pdf purpose the purpose of this paper is to develop a conceptual framework that can be used to formalise a reporting model for intellectual capital. To investigate the association of intellectual capital with respect to university performance and efficient working. The interaction of intellectual capital assets and. The schemes that can be applied singly or across the three types relate to 14value creationthe strategic generation of. This article is the first to analyze and assess the taxation of intellectual capital within this broader interdisciplinary landscape. There is a significant difference between intellectual capital, such as. Journal of intellectual capital capital intelectual.
Intellectual capital and company value article pdf available in procedia social and behavioral sciences 110 january 2014 with 1,709 reads how we measure reads. Intellectual capital is one of the most important intangible assets in the firms. If an organization has a personnel inventory whose knowledge and skills are vital in the longrun, the first part of the. European journal of business management, 21, 161180. The international journal of human resource management. To study the role of intellectual capital by comparing public and private sector universities.
Managing intellectual capital intellectual capital management is the active management of intellectual capital resources with multiplicative effects. The most well known asset types are tangible in nature. Specifically, a onestandarddeviation increase in the level of a firms intellectual capital is associated with an increase of 6. Therefore, the importance and necessity of research has become. Issue 1 20 beyond the crossroads the third stage of intellectual capital research.
In the new millennium, intellectual capital will be the primary resource and driver of our information economy1. Ic is a broad concept which is often split into different categories most commonly human, relational and structural capital. The financial crisis of banks before, during and after. The pulics valueadded intellectual coefficient vaic method with the extended and modified version introduced by former scholars was used to measure ic, whereas bank productivity was. First, intellectual capital is a firms only appreciable asset. Intellectual capital the commitment and competence of workers is embedded in how each employee thinks about and does work and in how an organization creates policies and systems to get work done. Intellectual capital or intangible assets that create a profit, is tacit and cannot be defined clearly. Characteristics of intellectual capital although intellectual capital is similar to tangible assets in its potential for generating future cash. Relational capital is the external linkage of the company with suppliers and customers that enables it to procure and sell goods and services in an effortless manner. Matrix report into the exploitation of intellectual.
Irina berzkalne and elvira zelgalve procedia social and behavioral sciences 110 2014 887 896. Measurement of intellectual capital components through activity. However, there are very few earlier studies systematically combining these approaches and demonstrating how ic assets and their management mechanisms. These three components of the model drive the national culture of innovation and thereby, contribute to development and growth. However, there are very few earlier studies systematically combining these approaches and demonstrating how ic assets and their management mechanisms might interact in organizational value creation. Content and determinants of intellectual capital disclosure. Intellectual capital ic is intellectual material knowledge, information, intellectual property, experience that can be put to use to create wealth collective brainpower granstrand 1999 intellectual property ip is property directly related to the creativity, knowledge and the identity of an individual. The objective of this paper is to analyze both definitions of the intellectual capital and the. Intellectual capital a strategic factor of socioeconomic. What is intellectual capital management icm intellectual capital is defined as all knowledge within an organisation which has the potential to create value when applied in line with the mission, vision and goals of the organisation. Another way of measurement of intellectual capital belonging to synthetic methods is knowledge capital earnings kce. Intellectual capital management asia pacific intellectual. Generally speaking, we can argue that intellectual capital average scores are good predictors of future banking performance.
Karanja ngugi department of accounting and finance kenyatta university kenya citation. Intellectual capital theory of entrepreneurship dr. Purpose intellectual capital ic is considered as a lifeblood of the hightech and knowledgebased sectors. This study examines the impact of intellectual capital on the financial performance of listed companies which has been paid in tehran stock exchange of structural capital, human capital and physical capital.
Influence of intellectual capital on the board of directors. Bourdieu 1986, putnam 1993, swart 2006 specify that intellectual capital is the composition of human capital. Human capital stock market structural capital intellectual capital corporate. Ideas, skills, and creative potential are the essence of intellectual capital webster and jensen, 2006. According to stewart, intellectual capital is consisted of three interconnected parts, namely, human capital, structural capital and customer capital. Pdf intellectual capital management and school performance. Ghorbani and associates 83 in a study entitled the impact of intellectual capital on the financial performance of the pharmaceutical industry in iran that was conducted on the 22 pharmaceutical companies. Only owing to its implementation, productivity of material and financial resources grows. At the end of the 20th century, the world economy started to undergo certain changes that have a decisive impact on aspects such as the generation of wealth and economic growth andriessen. In this model, the intellectual capital is composed of human capital and structural capital. Intellectual capital broadly defined to include nonphysical sources of value such as patents and s, computer software, organizational processes and knowhow has a long history of being undervalued and excluded from measures of economic productivity and wealth. Intellectual capital and its effect on financial performance. The importance of intellectual capital comes from the fact that traditional accounting systems do not reflect reality for managers or investors in such a way that they understand how their resources many of which are intangible create value in the future. It is based on the assumption that intellectual capital does not produce any value.
Eric ej1056382 the impact of intellectual capital on. The iirc prototype paper states, that, very similar to intellectual capital, not all capitals an organization uses or that it affects are owned by the organization. This study will utilize four components of intellectual capital, namely, human, structural, relational and spiritual that have effect on. One bank in particular that was ranked very low in 2005 intellectual capital scores eventually failed to survive autonomously. Examples of this include industry insights, trends and forecasts. The resultant model comprises the key innovation life. Issue 2 2010 intellectual capital and nonprofit organizations in the knowledge economy. Integrated reporting and intellectual capital concepts. The components of intellectual capital were value added of capital employee vaca, value added of human capital vahu, and structural capital value added stva. Stewart 1998 intellectual capital human capital, structural capital and customer capital redovisnings ra det 1998 immaterial values rd, concessions, patents, licences, trademarks, and similar.
A matrix intellectual capital ic panel has been brought together by deti to oversee the study and the integrity ni consortium appointed by deti to supportthe matrix ic panel. According to sveiby 2014 all methods can be divided into four main groups. Direct intellectual capital methods dicm estimation of the value of intangible assets is first determined by identifying the components. It is the sum of everything everybody in a company knows that gives it a competitive edge. The two key academic discussions addressing knowledge in organizations are the intellectual capital ic and knowledge management km literatures. Oct 01, 2011 pashar and shachar proposed that the five components of national intellectual capital were human capital, market capital, process capital, renewal capital, and financial capital. The intellectual capital in addressing current or projected states. This study will utilize four components of intellectual capital, namely, human, structural, relational and spiritual that have effect on bods style. Organizational performance is increasingly grounded on knowledgerelated issues.
Ces working papers volume vi, issue 4 57 intellectual capital. Structural capital is composed of customer capital and organizational capital. Pdf intellectual capital of the european universities. Therefore, there is a great need to highlight the importance of ic in the banking sector. This study explores the types of intellectual capital ic information considered important by analysts. Copyright 2014 by academic publishing house researcher. In the nursing intellectual capital theory, human capital investment is redefined as employer support for nurse continuing professional development. The impact of intellectual capital on the financial. Jun 07, 2015 the intellectual capital in addressing current or projected states. By 2012, it was forced to be rescued by governmental aid using public funds. Measuring and reporting intellectual capital research team. It consisted of human capital, structural capital, capital employed, and relational capital with the impact on the productivity of islamic banks in malaysia. Matrix report into the exploitation of intellectual capital.
The main purpose of this research study is to explore the role and relationship of intellectual capital and its three components on the performance and efficient working of universities in pakistan. It is the combination of different capitals or intangible assets within a firm. Abstract in knowledgebased economy, the intellectual capital is used for. It doesnt appear on the company balance sheet but it has more value for organisations than physical assets. Education sector especially universities were selected because it plays a critical role for the development. Using patentbased and researchanddevelopmentbased variables as proxies for intellectual capital, we find robust evidence that the relation between intellectual capital and leverage is positive. Human capital means the knowledge and skill level of corporate personnel. The interaction of intellectual capital assets and knowledge. Jul 08, 2014 the two key academic discussions addressing knowledge in organizations are the intellectual capital ic and knowledge management km literatures. Intellectual capital efficiency and corporate performance. The finance performances were measured by return on assets roa, return on equity roe, and growth of revenue. Intellectual capital is a concept that is achieving researchers attention day by day. A critical approach on definitions and categorization diana gioacasi abstract.
While past economies depended on use of land, natural resources, equipment and capital for the creation of value, our information economy will depend on application of knowledge. Intellectual capital ic is a component and attribute in all three categories 3 ps and should act as a bridge between reporting financial and nonfinancial information. A primer on intellectual capital asian development bank. Tangible capital therefore refers to the physical and. Intellectual capital can be both the end result of a knowledge transformation process or the knowledge that is transformed into intellectual property.
Although organizations have avoided the area of intellectual capital for many years15, scholars have come to emphasize the apparent importance of measuring and managing intellectual capital 16. In the context of education sector especially universities ram. Pdf intellectual capital and company value researchgate. Procedia social and behavioral sciences 109 2014 614 621. A strategic model for measuring intellectual capital in. Pdf the impact of intellectual capital on the financial. Intellectual capital is the intangible value of a business, covering its people human capital, the value relating to its relationships relational capital, and everything that is left when the employees go home structural capital, of which intellectual property ip is but one component. For understanding the importance and significance of intellectual capital management in developing countries. Intellectual capital human capital structural capital customer capital. The taxation of intellectual capital by lily kahng ssrn.
The company implemented a twoforone stock split for shareholders on. Issue 4 2014 intellectual capital, science parks and incubators. Effect of intellectual capital on competitive advantage and business performance. Eric ej1056382 the impact of intellectual capital on the. Enterprises intellectual capital is all capital that exists within the boundaries of the organisation, including relations with the external environment. Intellectual capital has become the leading resource for creating economic value and there are an important number of publications focused on this area of research. Finally, the organizational capital is composed of innovation capital and process capital edvinsson, 2002. An innovative model for measuring intellectual capital.
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