An investigation of intellectual capital impact on companies' market value and financial performace

Abstract

The main objective of the present study is to measure intellectual capital and investigate its effect on market value and performance measures of 60 Iranian firms listed in Tehran Stock Exchange from three different industries including pharmaceutical products, chemical products and automobile and parts manufacturing industries during the period of 2009-2012. The obtained results indicated that, in pharmaceutical products and automobile and parts manufacturing industry, market value is significantly and positively affected by IC and its components, except for structural capital efficiency and, moreover, in chemical products industry, IC has not any significant relationship with market value, but, some of its components including human capital efficiency and capital employed efficiency have significantly positive relationship with market value indicator. Regarding IC effect on performance measures, it is worth noting that two performance measures of return on asset (ROA) and return on equity (ROE) are significantly associated to IC and some of its components in all three types of industry especially pharmaceutical products and automobile and parts manufacturing industries. Revenue growth (GR), as another performance measure, is significantly affected by IC and its components only in automobile and parts manufacturing industry. Accordingly, it can be concluded that these observed relationships are moderately affected by industry rype.

Keywords: intellectual capital, market value, financial performance, Tehran Stock Exchange