Determinants of market to book value and financial performance of Chinese listed firms: implication of MVAIC model

Majumder, Shapan Chandra; Appiah, Bismark Kusi; Cardorel, Obambi Chardel

doi:10.1504/ijlic.2021.114612

Cited by 6 publications

(7 citation statements)

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“…Furthermore, the mean values of HCE, SCE, and RCE in Pakistan and India are higher than the mean values of CEE, which indicates that Pakistani and Indian companies create IC value via intangible assets as opposed to physical components, i.e., CEE. The results of this study are consistent with previous studies that indicate that IC, rather than physical capital, provides greater value to firms in developing countries ( Pulic, 2004 ; Zeghal and Maaloul, 2010 ; Majumder et al, 2021 ; Murali et al, 2021 ). The greater mean value of company age in India indicates that Indian enterprises have more experience or average age than Pakistani firms.…”

Section: Discussionsupporting

confidence: 92%

Intellectual capital and financial performance: A comparative study

et al. 2022

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Intellectual Capital (IC) is a driving force behind the financial performance of non-financial firms. Investing in intellectual and physical capital allows companies to optimize their financial performance by maximizing resource utilization. This study aims to determine whether IC efficiency impacts the financial performance of listed Pakistani and Indian companies between 2010 and 2020. Return on Assets (ROA) and Return on Equity (ROE) are used to calculate financial performance, and IC is calculated using the modified Value-Added Intellectual Coefficient (MVAIC) model. Regression analysis is performed using the STATA software developed by the South Texas Art Therapy Association. Human Capital (HC), Structural Capital (SC), and Capital Employed (CE) have a significant impact on Pakistani and Indian firms’ financial performance. Resource-based theory (RBT) supports these findings. The findings should provide management with a prompt to improve financial performance and emphasize the importance of IC. A rare study has addressed the impact of IC on firm financial performance using the MVAIC model, rather than the VAIC model, in Pakistan and India.

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Section: Discussionsupporting

confidence: 92%

Intellectual capital and financial performance: A comparative study

et al. 2022

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“…The mean value of HCE is 5.017 compared to the 0.477 (CEE), 0.757 (SCE), and 0.263 (RCE). This findings support the previous studies that human capital is a significant driver to create IC value in developing economies compared to other components (Majumder et al, 2021;Nimtrakoon, 2015). Three components HCE, SCE and RCE represent the value created by investment on employees' skills and knowledge, organizations' structure and relational networks which explains their intangible nature.…”

Section: Resultssupporting

confidence: 90%

“…Notably, the sum of mean values of HCE, SCE, and RCE is higher than mean of CEE (0.477) which suggests that Pakistani firms are creating more IC value through intangible components instead from tangible components i.e., CEE. This result is consistent with the findings that firms operating in less developed economies create more value via intangible assets rather than physical capital (Majumder et al, 2021;Pulic, 2004;Zé ghal & Maaloul, 2010). Additionally, Table 2 reveals descriptive statistics of four control variables leverage (LEV), sales growth (SG), firm size (FS), firm age (FA).…”

Section: Resultssupporting

confidence: 85%

“…In contrast, Nimtrakoon (2015) provided evidence that technology firms in ASEAN countries highly invest in human capital and structural capital to create overall IC value. In another study by Majumder et al (2021), it is noted that construction sector highly invested in capital employed and human capital to increase firm performance. Literature review revealed the lack of research on comparison of IC efficiencies (using MVAIC) in the non-financial sector.…”

Section: Business and Economic Researchmentioning

confidence: 99%

“…Studies based on modified VAIC model often found no association between relational capital and firm performance (Bayraktaroglu et al, 2019;Nimtrakoon, 2015;Restuti et al, 2019;Sardo & Serrasqueiro, 2017). For Chinese firms in the cement sector, Majumder et al (2021) employed MVAIC method to determine the IC and firm performance relationship for the period of 2009-2018. They employed both accounting performance and market performance measures and produced mixed results based on different proxies of firm performance: HCE and CEE positively while SCE and RCE negatively influenced all measures of firm performance namely, ROA, net profit (NP) and MB.…”

Section: H1 Different Industries Invest Differently In Mvaic Hce Sce Rce and Ceementioning

confidence: 99%

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Intellectual Capital and Firm Performance across Pakistani Industries

Ahmad

Rus

2021

BER

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This study sheds light on the differences in intellectual capital (IC) efficiencies across non-financial sectors in Pakistan and determines the relationship between IC and firm performance. The study used sample of 155 non-financial firms from the manufacturing and service industries of Pakistan for the period 2009-2018. This study contributes to IC research by applying modified value-added intellectual capital (MVAIC) model with relationship to firm performance (return on assets and Tobin’s Q) of Pakistani non-financial firms which was overlooked by the previous researchers. In addition, to deal with endogeneity, the dynamic panel generalized methods of moments regression is applied to test the relationship between IC and performance. Findings provide evidence that different sectors in non-financial industries manage IC components differently. IC increases both market-based performance and accounting-based performance of Pakistani firms. Among all IC components, human capital efficiency is an important determinant of firm performance. The implication can provide help managers and investors to understand the IC to increase the firm performance.

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