Research background: Currently the topic of a company’s intellectual capital is being widely investigated by various researchers. Nevertheless, only a small number of studies on the company’s ...intellectual capital impact on its market value were conducted. What is more, the concept of a company’s intellectual capital itself is not unified. There are some discrepancies in defining a company’s intellectual capital, unifying structural model of the company’s intellectual capital, and harmonizing the research methods and models of how to evaluate a company’s intellectual capital. Purpose of the article: The aim of the article is to examine various scientific approaches of the company’s intellectual capital and its impact on the market value of a respective company; to prepare a model of company’s intellectual capital and its impact on the market value. What is more, the aim of this article is to check and test the model effectiveness using an example of the Baltic States listed companies. Methods: Data on 58 Baltic States’ companies that are listed in Nasdaq Baltic stock exchange were taken as the basis of the research. Based on four component model (human capital, structural capital, juridical capital, relational capital) a set of indicators for assessing company’s intellectual capital was formed. Expert evaluation was used in order to assign weights for different structural parts of intellectual capital. An exploratory factor analysis was conducted in order to find out what factors are the most significant for a company’s intellectual capital. In order to find out how specific elements affect company’s intellectual capital, a pair-wise multiple correlation and regression analysis were used. An average comparison method was used to reveal differences between companies of different countries. Findings & Value added: The study contributes to the Baltic States’ knowledge on intellectual capital. It was detected that it is appropriate to use human capital, structural capital, juridical capital, and relational capital structural parts as components of company’s intellectual capital while investigating its impact on market value of a respective company. According to the obtained results, the model of a company’s intellectual capital and its impact on the market value was created, optimized, and its validity checked using exploratory factor analysis. The model was used to test the Baltic States listed companies and how their intellectual capital affects the market value. It was identified that intellectual capital in the listed companies of the Baltic States has a positive impact on their market value. Nevertheless, the study revealed that intellectual capital structural parts do not equally affect the market value of listed companies. The findings support the conclusion that human capital and relational capital have the greatest influence on the market value of listed companies. Companies where structural capital comprises the largest proportion of intellectual capital had lower levels of intellectual capital aggregated index, which could be examined in future studies.
► We compare conventional and Islamic banks across 22 countries with both bank types. ► Islamic banks are less efficient, but intermediate more, especially during crises. ► During crises, Islamic ...banks are better capitalized, with lower loan losses. ► Recent stock performance of Islamic banks due to more capital and lower loan losses.
How different are Islamic banks from conventional banks? Does the recent crisis justify a closer look at the Sharia-compliant business model for banking? When comparing conventional and Islamic banks, controlling for time-variant country-fixed effects, we find few significant differences in business orientation. There is evidence however, that Islamic banks are less cost-effective, but have a higher intermediation ratio, higher asset quality and are better capitalized. We also find large cross-country variation in the differences between conventional and Islamic banks as well as across Islamic banks of different sizes. Furthermore, we find that Islamic banks are better capitalized, have higher asset quality and are less likely to disintermediate during crises. The better stock performance of listed Islamic banks during the recent crisis is also due to their higher capitalization and better asset quality.
•We introduce imperfect information and learning about firm’s exposure to macroeconomic risks into an asset pricing model.•Firms with old capital age have higher capital allocation efficiency; are ...more exposed toaggregate productivity shocks and earn higher expected returns; and have shorter cashflow duration.•We provide extensive empirical evidence that directly supports our key learning mechanism.•We differentiate our explanation from other alternative economic channels.
Imperfect information and learning are introduced into a production-based asset pricing model. Our model features slow learning about firms’ exposure to aggregate productivity shocks over time. In contrast to a full information case, our framework provides a unified explanation for the stylized empirical features of the cross-section of stocks that differ in capital age: old capital firms (1) have higher capital allocation efficiency; (2) are more exposed to aggregate productivity shocks and, hence, earn higher expected returns, which we refer to as capital age premium; and (3) have shorter cash-flow duration, when compared with young capital firms.
Purpose
The purpose of this paper is to empirically investigate the relationship between foreign capital inflows, human capital development (HCD) and economic growth in ECOWAS countries.
...Design/methodology/approach
In line with the augmented Solow model, the relationship between foreign capital inflows, human capital development and gross domestic product in the ECOWAS member countries is investigated using the pool mean group method.
Findings
The authors find overwhelming evidence that foreign capital inflows and human development have a significant effect on economic growth in ECOWAS member countries. However, foreign direct investment (FDI), official development assistant, HCD and gross domestic investment are positively related to economic growth in sub-regions economies. Conversely, migrate official remittance, portfolio investments and external debts are negatively related to economic growth.
Research limitations/implications
The authors recommend that sound economic policies should be targeted in encouraging foreign capital accumulation and HCD, especially on FDI, official development assistance that exerts a positive impact on the economic growth of the sub-region. Therefore, training is required to prepare the labor force to work with new technologies and promote efficient enterprise for ECOWAS economies to compete with developed countries and emerging economies.
Social implications
This study argued that the development of human capital is a pathway that may lead countries away from sustained growth. In the context of any economy which lack well-developed capital and education markets, many otherwise qualified citizens may be denied the basic skills they need in order to contribute fully to the nation’s economic development. HCD would encourage foreign investments, resulting in reduction in poverty in ECOWAS countries.
Originality/value
Several studies have been done on foreign capital inflow and economic growth nexus such as Orji
et al.
(2014), Ajide and Raheem (2016), Musibau
et al.
(2017), etc.; however, none of the research studies has actually examined the effect of the relationship between foreign capital inflows and HCD on economic growth in ECOWAS countries. This study is designed to fill the vacuum.
Since the 1970s, the concept of counterurbanization has been used within geographical and rural studies to denote the demographic revival and growth of rural areas. However, little is known about how ...contemporary urban-to-rural migrants actually search for their future residence. This is unfortunate, as the increased use of internet search tools may become a crucial facilitator for significant counterurbanization by providing families key information about hitherto ‘forgotten’ places where they can, better than in the larger cities, achieve the specific stocks, or ‘configurations’, of social, cultural and economic capital they desire. Therefore, drawing on Contextual Inquiry based, semi-structured interviews with 8 Danish families in various parts of Denmark in spring 2018, the purpose is to shed more light on how families with children in practice use what we term information capital, i.e. online and offline search strategies, in order to find their ideal rural place to live. In this way, information capital becomes a kind of ‘auxiliary’ capital, which allows various types of families to identify and achieve exactly the configurations of capital they desire and, by this, increase their life quality. Within a dynamic, Bourdieusian capital conversion framework, the paper shows how the families must ‘sacrifice’ capital in order to achieve desired forms of capital, that is, make trade off between various forms of capital, as for example trading off economic for social capital.
•Urban-to-rural migrant families can be divided into three ideal types: Relation, Practical and Practical-Relation families.•Trade-off strategies: In relation to relocation, families traded off some forms of capital for others, e.g. economic for social.•Internet search tools should be seen as an important facilitator for counterurbanization.•In their search for a new rural location, both online and offline information capital became crucial for all families.
This paper examines whether access to the capital market of convertible and nonconvertible bonds affects total factor productivity (TFP) for the population of Italian joint stock manufacturing ...companies, based in highly segmented local financial markets, between 2007 and 2017. The hypothesis, well grounded in the literature, is that long‐term capital favors investment in intangibles and other risky assets necessary for productivity growth. To identify this effect, we exploit the exogenous shock of the Italian banking deregulation of the mid‐1990s as an instrument for firm‐level access to capital, interacted with distance from logistic networks. These reforms changed the distribution of the type of branches at the local level, increasing the share of joint stock banks, which have high connections to international capital markets. This geographical reallocation of banking activities ultimately affected firms' financial structure, favouring their access to capital, even when based in peripheral financial areas. Firms which issued instruments of market debt achieved higher levels of productivity and a higher probability to reach top percentiles of productivity distribution.
Entrepreneurship as Experimentation Kerr, William R.; Nanda, Ramana; Rhodes-Kropf, Matthew
The Journal of economic perspectives,
07/2014, Volume:
28, Issue:
3
Journal Article
Peer reviewed
Open access
Entrepreneurship research is on the rise but many questions about the fundamental nature of entrepreneurship still exist. We argue that entrepreneurship is about experimentation; the probabilities of ...success are low, extremely skewed, and unknowable until an investment is made. At a macro level, experimentation by new firms underlies the Schumpeterian notion of creative destruction. However, at a micro level, investment and continuation decisions are not always made in a competitive Darwinian contest. Instead, a few investors make decisions that are impacted by incentive, agency, and coordination problems, often before a new idea even has a chance to compete in a market. We contend that costs and constraints on the ability to experiment alter the type of organizational form surrounding innovation and influence when innovation is more likely to occur. These factors not only govern how much experimentation is undertaken in the economy, but also the trajectory of experimentation, with potentially very deep economic consequences.
Policy distortions and financial frictions are two leading candidates in generating capital misallocation. This paper designs an identification strategy to separate their effects on average MRPK ...dispersion across firm ownership, as the average treatment effect on the treated and the selection bias from a policy intervention. Financial frictions are estimated to cause an aggregate TFP loss of 8.3 percent on the intensive margin, which accounts for 30 percent of the capital misallocation observed in China. Using the counterfactual MRPK from a matching procedure, some popular hypotheses on what drive the policy distortions are tested in the matched samples.
•A general model on capital misallocation with both financial frictions and policy distortions.•An identification strategy to separate financial frictions from policy distortions using firm ownership.•Financial frictions cause an 8.3 percent of aggregate TFP loss or 30 percent of capital misallocation.•Testing several popular hypotheses on what drive the policy distortions.
Purpose
The purpose of this paper is to explore the moderation effect of strategic knowledge management (SKM) on the relationship between three components of intellectual capital (IC) and firm ...innovation and market performance. The authors argue that specific combinations of IC components and SKM activities can lead to higher innovation and market performance. It is also trying to assist companies to capitalize on both their IC and SKM.
Design/methodology/approach
Survey data have been collected from 101 Serbian companies, and these have been analyzed by using structural equation modelling (SEM) and fuzzy set qualitative comparative analysis (fsQCA) techniques.
Findings
The SEM results show that structural capital and relational capital have a direct effect on innovation performance. Although, there is no significant direct effect of human capital on innovation performance, the relationship becomes significant when moderated by SKM. The effects of human and structural capital on innovation performance are negatively moderated by SKM activities, while SKM positively moderates the effect of relational capital on innovation performance, but remained insignificant. Moreover, the insights from fsQCA show a clear pattern of equifinality, in that there are multiple combinations of static and dynamic conditions that can lead to higher innovation and market performance.
Originality/value
Two separate research fields of “static” IC and “dynamic” knowledge management have been combined in one integrated framework. From a methodological perspective, symmetric and asymmetric statistical tools have been combined to better understand contingency and interactions. This approach contributes to the literature and potentially offers a better understanding of how static intangible assets should be enabled by dynamic knowledge-based managerial activities to achieve high performance. The paper demonstrates that SKM capability matters with only a specific constellation of IC resources and therefore suggests a novel explanation for performance variances.
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