Year of Graduation
The Impact of Intellectual Capital on Companies' Value: the Role of Economic Crisis
Faculty of Economics
This research investigates the influence of the components of intellectual capital on companies’ value and moderation effect of economic crisis on these relationships. The components of intellectual capital cannot exist in isolation, and influence each other. In the framework of research design we assume that the structural capital and relational capital have a direct impact on companies’ value and also act as mediation factors in the relationship between human capital and value. We also consider how the relationships described changed under the condition of crisis trying to determine the moderation effect of negative shock. We use the method of partial least squares (PLS) to assess the structural relationships between latent variables. The Database for the empirical study includes observations on companies from five largest European countries belonging to different industries. The data collected for the period from 2004 to 2011 years. Each intellectual capital’s component is described with a set of indicators compiled on the basis of publicly available information. The dependent variable is represented by Market Value Added. To test the hypotheses about interaction of intellectual capital’s components and value the model was assessed for the whole sample. The moderation effect was tested by analyzing two subsamples and comparing the results with the multi-group test. The study confirmed a statistically significant and positive relationship between the components of intellectual capital and the company's value. It was found that human capital has a positive influence on the structural and relational components of intellectual capital, which in turn directly affect the value of the companies. We also determined that the relationship between human capital and relational capital was stronger during the period of unstable economy. In general, it was found that the intellectual resources were the drivers of companies’ value both in the period of growth and period of recession. This study shows that it is important to take into account possible relationships between intellectual resources when conducting empirical research. This research also contributes to previous empirical works in terms of the methodology used and of impact of the crisis on the interactions considered.