Journal of Applied Economic Research
ISSN 2712-7435
The Impact of Intellectual Capital on Performance and Investment Attractiveness of Russian Companies
H.S.M. Deghles, N.R. Kelchevskaya
Ural Federal University named after the First President of Russia B.N. Yeltsin, Ekaterinburg, Russia
Abstract
Historically, the growth of intellectual capital has been associated with the trend of an increasing market capitalization of firms, but in practice the consequences of investing in companies that use intellectual capital are often not clear. Studying the relationship between intellectual capital and the ability of companies to generate a stable revenue as an indicator of investment attractiveness is becoming a relevant area of research. The purpose of this article is to study the influence of the intellectual capital of companies on their performance, and, consequently, on possible decisions of investors. The main hypothesis was an assumption about positive significant impact of the dynamic and static structural, relational and human capital of companies on the company's ability to generate revenue and retain a certain market share throughout the year, and, consequently, demonstrate its attractiveness to potential investors. Research method: regression analysis using logistic models, based on proposed models. The likelihood of the high performance of companies is determined under the influence of intellectual capital components, which would determine potential positive decisions made by investors using financial indicators, such as revenue and market share. In contrast to previous studies, we distinguish between static and dynamic elements of intellectual capital in the models to assess the likelihood of high performance. The hypotheses about the influence of the elements of intellectual capital on the company's revenue and their ability to retain market share, which together are indicators of performance reflecting the investment attractiveness of companies, were confirmed. The results show a moderate positive relationship between revenue, market share and quality metrics for static and dynamic intellectual capital. Elements of relational and structural capital play a key role in achieving performance. From the practical point of view, managers can rely on the results of the study when developing investment strategies and revealing the drivers of investment attractiveness growth in companies that intensively use intellectual capital
Keywords
intellectual capital; effectiveness; investments; investment decision
JEL classification
O34References
1. Pike, S., Boldt-Christmas, L., Roos, G. (2006). Intellectual capital: origin and evolution. International Journal of Learning and Intellectual Capital, Vol. 3, Issue 3, 233–248. DOI: 10.1504/IJLIC.2006.011312.
2. Dumay, J., Garanina, T. (2013). Intellectual capital research: a critical examination of the third stage. Journal of Intellectual Capital, Vol. 14, Issue 1, 10–25. DOI: 10.1108/14691931311288995.
3. Hamzah, N., Ismail, M.N. (2009). Linking business strategy and knowledge management practices: Case studies of Malaysian firms. International Journal of Knowledge Management Studies, Vol. 3, Issue 1–2, 22–39. DOI: 10.1504/IJKMS.2009.023462.
4. Dumay, J. (2013). The third stage of IC: towards a new IC future and beyond. Journal of Intellectual Capital, Vol. 14, Issue 1, 5–9. DOI: 10.1108/14691931311288986.
5. Shakina, E., Barajas, A. (2014). Value creation through intellectual capital in developed European markets. Journal of Economic Studies, Vol. 41, Issue 2, 272–291. DOI: 10.1108/JES-08-2012-0122.
6. Kelchevskaya, N.R., Chernenko, I.M., Popova, E.V. (2017). Vliianie korporativnoi sotsialnoi otvetstvennosti na investitsionnuiu privlekatelnost rossiiskikh kompanii (The Impact of Corporate Social Responsibility on the Investment Attractiveness of the Russian Companies). Ekonomika regiona (Economy of Region), Vol. 13, Issue. 1, 157–169. DOI: 10.17059/2017-1-15.
7. Dumay, J., Cai, L. (2014). A review and critique of content analysis as a methodology for inquiring into IC disclosure. Journal of Intellectual Capital, Vol. 15, Issue 2, 264–290. DOI: 10.1108/JIC-01-2014-0010.
8. Bismuth, A., Tojo, Y. (2008). Creating value from intellectual assets. Journal of Intellectual Capital, Vol. 9, Issue 2, 228–245. DOI: 10.1108/14691930810870319.
9. Molodchik, M., Shakina, E., Bykova, A. (2012). Intellectual capital transformation evaluating model. Journal of Intellectual Capital, Vol. 13, Issue 4, 444–461. DOI: 10.1108/14691931211276089.
10. García-Meca, E., Martínez, I. (2007). The use of intellectual capital information in investment decisions. International Journal of Accounting, Vol. 42, Issue 1, 57–81. DOI: 10.1016/j.intacc.2006.12.003.
11. Farooq, O., Nielsen, C. (2014). Improving the information environment for analysts. Journal of Intellectual Capital, Vol. 15, Issue 1, 142–156. DOI: 10.1108/JIC-12-2012-0109.
12. Dumay, J.C., Tull, J.A. (2007). Intellectual capital disclosure and price‐sensitive Australian Stock Exchange announcements. Journal of Intellectual Capital, Vol. 8, Issue 2, 236–255. DOI: 10.1108/14691930710742826.
13. Rooney, J., Dumay, J. (2016). Intellectual capital, calculability and qualculation. British Accounting Review, Vol. 48, Issue 1, 1–16. DOI: 10.1016/j.bar.2015.07.002.
14. Edvinsson, L. (2000). Some perspectives on intangibles and intellectual capital. Journal of Intellectual Capital, Vol. 1, Issue 1, 12–16. DOI: 10.1108/14691930010371618.
15. Marr, B. (2004). Measuring and benchmarking intellectual capital // Benchmarking: An International Journal, Vol. 11, Issue 6, 559–570. DOI: 10.1108/14635770410566474.
16. Andreeva, T., Garanina, T. (2016). Do all elements of intellectual capital matter for organizational performance? Evidence from Russian context. Journal of Intellectual Capital, Vol. 17, Issue 2, 397–412. DOI: 10.1108/JIC-07-2015-0062.
17. Peng, T.J.A., Yang, J.C-H., Pike, S., Roos, G. (2011). Intellectual capitals, business models and performance measurements in forming strategic network. International Journal of Learning and Intellectual Capital, Vol. 8, Issue 3, 328–347. DOI: 10.1504/IJLIC.2011.041077.
18. Vaisanen, J., Kujansivu, P., Lonnqvist, A. (2007). Effects of intellectual capital investments on productivity and profitability. International Journal of Learning and Intellectual Capital, Vol. 4, Issue 4, 377–391. DOI: 10.1504/IJLIC.2007.016334.
19. Cabrita, M.D.R., Bontis, N. (2008). Intellectual capital and business performance in the Portuguese banking industry. International Journal of Technology Management, Vol. 43, Issue 1/2/3, 212–237. DOI: 10.1504/IJTM.2008.019416.
20. Bontis, N. (1998). Intellectual capital: an exploratory study that develops measures and models. Management Decision, Vol. 36, Issue 2, 63–76. DOI: 10.1108/00251749810204142.
21. Roos, G., Pike, S., Fernstrom, L. (2007). Managing Intellectual Capital in Practice. Linacre House, Jordan Hill, Oxford, Butterworth-Heinemann, 397 p. DOI: 10.4324/9780080479118.
22. Abhayawansa, S., Guthrie, J. (2016). Drivers and semantic properties of intellectual capital information in sell-side analysts’ reports. Journal of Accounting & Organizational Change, Vol. 12, Issue 4, 434–471. DOI: 10.1108/JAOC-05-2014-0027.
23. Robinson, G., Kleiner, B.H. (1996). How to measure an organization’s intellectual capital. Managerial Auditing Journal, Vol. 11, Issue 8, 36–39. DOI: 10.1108/02686909610131675.
24. Boedker, C., Guthrie, J., Cuganesan, S. (2005). An integrated framework for visualising intellectual capital. Journal of Intellectual Capital, Vol. 6, Issue 4, 510–527. DOI: 527. 10.1108/14691930510628799.
25. Guthrie, J., Petty, R., Ricceri, F. (2006). The voluntary reporting of intellectual capital: Comparing evidence from Hong Kong and Australia. Journal of Intellectual Capital, Vol. 7, Issue 2, 254–271. DOI: 10.1108/14691930610661890.
26. Chen, Y.S. (2008). The positive effect of green intellectual capital on competitive advantages of firms. Journal of Business Ethics, Vol. 77, Issue 3, 271–286. DOI: 10.1007/s10551-006-9349-1.
27. Kianto, A., Waajakoski, J. (2010). Linking social capital to organizational growth. Knowledge Management Research & Practice, Vol. 8, Issue 1, 4–14. DOI: 10.1057/kmrp.2009.29.
28. Massingham, P.R., Tam, L. (2015). The relationship between human capital, value creation and employee reward. Journal of Intellectual Capital, Vol. 16, Issue 2. 390–418. DOI: 10.1108/JIC-06-2014-0075.
29. Cuozzo B., Dumay G., Palmaccio M., Lombardi R. (2017). Intellectual capital disclosure: a structured literature review. Journal of Intellectual Capital, Vol. 18, Issue 1, 9–28. DOI: 10.1108/JIC-10-2016-0104.
30. Kujansivu, P., Lonnqvist, A. (2007). How do investments in intellectual capital create profits? International Journal of Learning and Intellectual Capital, Vol. 4, Issue 3, 256–275. DOI: 10.1504/IJLIC.2007.015610.
31. Peng, T.A.T.-J.A., Pike, S., Roos, G. (2007). Intellectual capital and performance indicators: Taiwanese healthcare sector. Journal of Intellectual Capital, Vol. 8, Issue 3, 538–556. DOI: 10.1108/14691930710774902.
32. Santos-Rodrigues, H., Fernández-Jardón, C.M., Figueroa Dorrego, P. (2015). Relation between intellectual capital and the product process innovation. International Journal of Knowledge-Based Development, Vol. 6, Issue 1, 15–33. DOI: 10.1504/IJKBD.2015.069454.
33. Chen, J., Wang, Y. (2015). A new measurement of intellectual capital and its impact on innovation performance in an open innovation paradigm. International Journal of Technology Management, Vol. 67, Issue 1, 25. DOI: 10.1504/IJTM.2015.065885.
34. Kamukama, N., Ahiauzu, A., Ntayi, J.M. (2011). Competitive advantage: Mediator of intellectual capital and performance. Journal of Intellectual Capital, Vol. 12, Issue 1, 152–164. DOI: 10.1108/14691931111097953.
35. Kamukama, N., Ahiauzu, A., Ntayi, J.M. (2010). Intellectual capital and performance: testing interaction effects. Journal of Intellectual Capital, Vol. 11, Issue 4, 554–574. DOI: 10.1108/14691931011085687.
36. Khalique, M., Bontis, N., bin Shaari, J.A.N., Md. Isa, A.H. (2015). Intellectual capital in small and medium enterprises in Pakistan. Journal of Intellectual Capital, Vol. 16, Issue 1, 224–238. DOI: 10.1108/JIC-01-2014-0014.
37. Benevene, P., Cortini, M. (2010). Interaction between structural capital and human capital in Italian NPOs. Journal of Intellectual Capital, Vol. 11, Issue 2, 123–139. DOI: 10.1108/14691931011039642.
Acknowledgements
We are grateful to the participants of the survey of the intellectual capital issues, which we carried out 2017 and 2018 using “Google forms” platform. These data formed the basis of the empirical part of the study. We express our sincere gratitude and appreciation to the editor and reviewer for providing recommendations, which helped to structure and enrich the material of our study
About Authors
Degles Hani Sameh Mohammed
Post-Graduate Student, Department of Economics and Management of Metallurgical and Machine-Building Enterprises, Ural Federal University named after the first President of Russia B.N. Yeltsin, Ekaterinburg, Russia (620002, Ekaterinburg, Mira street, 19); ORCID 0000-0001-9082-5118; e-mail: deghles@mail.ru.
Kelchevskaya Natalia Removna
Doctor of Economics, Professor, Head of the Department of Economics and Management at Metallurgical and Machine-Building Enterprises, Ural Federal University named after the first President of Russia B.N. Yeltsin, Ekaterinburg, Russia (620002, Ekaterinburg, Mira street, 19); ORCID 0000-0001-7278-026X; e-mail: n.r.kelchevskaya@urfu.ru.
For citation
Degles H.S.M., Kelchevskaya N.R. The Impact of Intellectual Capital on Performance and Investment Attractiveness of Russian Companies. Journal of Applied Economic Research, 2021, Vol. 20, No. 1, 110-132. DOI: 10.15826/vestnik.2021.20.1.005
Article info
Received October 1, 2020; Revised October 20, 2020; Accepted November 20, 2020
DOI: http://dx.doi.org/10.15826/vestnik.2021.20.1.005
Download full text article:
~813 KB, *.pdf
(Uploaded
19.03.2021)
Created / Updated: 2 September 2015 / 20 September 2021
© Federal State Autonomous Educational Institution of Higher Education «Ural Federal University named after the first President of Russia B.N.Yeltsin»
Remarks?
select the text and press:
Ctrl + Enter
Portal design: Artsofte
Contact us
Rector's Office
Rector, Dr. Victor Koksharov
Tel. +7 (343) 375-45-03, e-mail: rector@urfu.ru
Vice-Rector for International Relations, Dr. Maxim Khomyakov
Tel. +7 (343) 375-46-27, e-mail: Maksim.Khomyakov@urfu.ru