African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4027

Full Length Research Paper

The impact of intellectual capital on firms’ financial performance and market value: Empirical evidence from Italian listed firms

William Forte
  • William Forte
  • Management and Innovation Systems Department, University of Salerno, 132, Giovanni Paolo II Street, 84084 Fisciano (SA), Italy.
  • Google Scholar
Gaetano Matonti
  • Gaetano Matonti
  • Management and Innovation Systems Department, University of Salerno, 132, Giovanni Paolo II Street, 84084 Fisciano (SA), Italy.
  • Google Scholar
Giuseppe Nicolò
  • Giuseppe Nicolò
  • Management and Innovation Systems Department, University of Salerno, 132, Giovanni Paolo II Street, 84084 Fisciano (SA), Italy.
  • Google Scholar


  •  Received: 06 December 2018
  •  Accepted: 18 January 2019
  •  Published: 14 March 2019

Abstract

The purpose of this paper is to extend the understanding of Intellectual Capital (IC) in the context of Italian listed firms. In this study, the Valued Added Intellectual Coefficient (VAIC) is employed as a measure of IC to investigate the relationship between IC, firms’ financial performance and market value. The empirical investigation is developed by using data drawn from a sample of 135 Italian listed companies for the period from 2008 to 2017 and performing different Ordinary Least Squares (OLS) regression models. The findings suggest that, when taken in its aggregated form, IC exerts a positive impact on firms’ financial performance measured as firms’ profitability and growth in revenues as well as on market value. However, when considering its components, only Human Capital efficiency shows a positive effect on firms’ financial performance while Structural Capital efficiency and Capital Employed efficiency exhibit a negative effect. Astonishingly, each of the individual IC components negatively influences firms’ market value.

 

Key words: Intellectual capital, intangible assets, valued added intellectual coefficient (VAIC), Italian listed firms, market value, financial performance.