ISSN: 2225-8329
Open access
In the age of knowledge-based economy, an organization uses two distinguished resources for value creation and profit making: material or tangible resources and intellectual or invisible resources. In fact, it is claimed that intellectual capital can explain better the material and physical capital and a company’s performance financial indices. Intellectual capital provides a new complete model for observing organizations’ real value and by using it; a company’s future value can be calculated. The objective of the present study is to investigate the influence of intellectual capital on financial performance of the listed companies in Tehran Stock Exchange. In order to assess the intellectual capital, the value added intellectual capital coefficient developed by Palyk was used, which is one of the most important and valuable methods of assessing intellectual capital. In the present study, the influence of intellectual capital indices (efficiency of human, structural and physical capitals) on financial performance (earnings per share and the efficiency of assets) for 70 companies during the years 2004 to 2007 was investigated using the panel data regression. Be reviewing the literature, four hypotheses were proposed. The results obtained from testing the hypotheses showed that intellectual capital has positive and significant influence on earnings per share and the efficiency of assets. The results of regression models show that intellectual capital has positive and significant influence on earnings per share and the efficiency of assets. Structural capital like other components of intellectual capital also has significant and positive on the efficiency of assets. The results also indicate that the negative influence of structural capital on earnings per share, however, because this influence is not significant enough, it can be neglected. The results of the approach of panel data are indicative of the significant influence of physical capital on earnings per share and the efficacy of assets. Therefore, increase in physical capital results in improving the financial performance of the studies companies.
Baltagi, B. (2005). Econometric Analysis of Panel Data, John Wiley & Sons, third edition.
Bontis, N. (1998), “There’s a price on your head: managing intellectual capital strate gically”, Business Quarterly, Summer, pp. 40-47.
Bontis, N., Keow, W. C. C., and Richardson, S. (2009), “Intellectual capital and Business performance in Malaysian Industries”, Journal of Intellectual capital, Vol. 1 No. 1, pp. 85-100.
Bramhandkar, A., Erickson, S., Applebee, I. (2007). Intellectual Capital and Organizational Performance an Empirical Study of the Pharmaceutical Industry, ECKM 2007, 8th European Conference on Knowledge Management, Barcelona.
Brooking, A. (1996). Intellectual Capital: Core Assets for the Third Millennium Enterprise, London, Thomas Business Press.
Chen, M. Y., Lin, J. Y., Hsiao, T. Y., Thomas, W. L. (2008). Censoring model for evaluating intellectual capital value drivers, Journal of Intellectual Capital, Vol.9, No.4, pp. 639-654.
Chen, J., Zhu, Z., and Xie, Y. H. (2006), “Measuring intellectual capital: a new model and empirical study” , Journal of Intellectual capital, Vol. 5 No. 1, pp. 85-100
Flamholtz, E. (1985). Human Resource Accounting and Effective Organization Control: Theory and Practice, Jossey Bass.
Guthrie, J., Petty, R., and Johanson, U. (2011), “Sunrise in knowledge economy: managing, measurement and Reporting”, Accounting, Auditing & Accountability Journal , Vol. 14 No. 4, pp. 366 – 382.
Holmen, J. (2011). Intellectual Capital Reporting, Management Accounting Quarterly, Vol.6, No.4.
Hsiao, C. (2003). Analysis of Panel Data, Cambridge University Press, Second Edition.
Kannan, G., and Aulbur, W. G. (2004), “Intellectual capital: measurement effectiveness”, Journal of Intellectual capital, Vol. 5, No. 3, pp. 389-413.
Lim, l. L. K., and Dallimore, P. (2004), “Intellectual capital: management attitudes in Service Industries”, Journal of Intellectual capital, Vol. 5, No. 1, pp. 181-194.
Marr, B., Gupta, O., Pike, S., and Roos, G. (2004), “Intellectual capital and knowledge management effectiveness”, Management Decision 41/3, 771–781.
Martinez, I., Garcia, M. E. (2005). Assessing the quality of disclosure on intangibles in The Spanish Capital Market, European Business Review, Vol. 17, No.4, pp. 305-313.
Mavridis, D. (2005). Intellectual capital performance drivers in the Greek banking sector, Management Research News, Vol.28, No.5, pp. 43-62.
Roos, G., and Roos, J. (1997), “Measuring Your Company’s Intellectual Performance”, Long Range Planning, Vol. 30 No. 3, pp. 413-426.
Sanchez, P., Chaminade, C., and Olea, M. (2010), “Management of Intangibles : an Attempt to Build a theory”, Journal of Intellectual Capital, Vol. 1 No. 4, pp. 312-327.
Seetharaman, A., Sooria, H. H. B. Z., and Saravanan, A. S. (2002), “Intellectual capital accounting and Reporting in the knowledge economy”, Journal of Intellectual capital, vol. 3 No. 2, pp . 128-148.
Stewart, T. (1997), Intellectual capital: The New Wealth of Organization, Doubleday/Currency, New York, NY.
In-Text Citation: (Ranani & Bijani, 2014)
To Cite this Article: Ranani, H. S., & Bijani, Z. (2014). The Impact of Intellectual Capital on the Financial Performance of Listed Companies in Tehran Stock Exchange. International Journal of Academic Research in Accounting Finance and Management Sciences. 4(1), 168 - 180.
Copyright: © 2014 The Author(s)
Published by Human Resource Management Academic Research Society (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: http://creativecommons.org/licences/by/4.0/legalcode