Financial performance, intellectual capital disclosure and firm value: the winning edge

Keter, Charles Kiprono Sang; Cheboi, Josephat Yegon; Kosgei, David

doi:10.1080/23311975.2024.2302468

Cited by 6 publications

(6 citation statements)

References 143 publications

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“…The agency model describes linkage between principal (management) and the agent. The management, generally accountable for finishing the key assignment, is related to the stakeholder (Keter et al, 2024;Fama and Jensen, 1983). Agency theory contends that the value of the firm can be enhanced by suitable incentives or monitoring to confine them from consuming their personal choices to enhance their own monetary rewards.…”

Section: Theoretical Motivation Of the Studymentioning

confidence: 99%

“…Consequently, agency problem is the outcome of information irregularity and the management pursues to condense asymmetry of information to lower the agency costs (Donnelly and Mulcahy, 2008). Firms are motivated to reveal IC to assure shareholders that they are reacting rationally on behalf of them, and it further reduces the agency cost (Keter et al, 2024;Vitolla et al, 2020;Jensen and Meckling, 1976). The signaling theory was developed by Michael Spence in 1978 with a motive to establish a signal framework in the working culture relation between an employer IIMT Journal of Management and employees.…”

Section: Theoretical Motivation Of the Studymentioning

confidence: 99%

“…The value of the firms is replicated in the form of market prices, known as financial outcome of firms' activities. Signaling theory postulates that stockholders trust on the information provided by firms (Keter et al, 2024;Vanini and Rieg, 2019;Abhayawansa and Abeysekera, 2009). The application of signaling theory related to the remedial measure for information asymmetry where externals do not permit for the access of inside core information of the company that is known to the internal managers.…”

Section: Theoretical Motivation Of the Studymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Relationship between intellectual capital and firm performance: evidence from the Indian sugar mill industry

Sharma,

Verma,

Patil

et al. 2024

IIMTJM

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PurposeThe aim of the study is to examine the influence of Intellectual Capital (IC) and its components on the financial performance of Indian sugar mill companies.Design/methodology/approachThe present study follows the quantitative research, and uses data from Indian sugar mill companies over the period of recent 10 years. The Modified Value- Added Intellectual Capital (MVAIC) method is employed to evaluate IC. Authors construct panel regression models to test the hypotheses where Return on Equity (RoE) and Return on Asset (RoA) were considered as a representation of financial performance (dependent variable) and IC has been considered as the independent variable along with control variables.FindingsThe findings reveal that IC components show greater explanatory power than aggregate IC and MVAIC has a positive relationship with firm performance. It is evident that Capital Employed Efficiency (CEE) and Relational Capital Efficiency (RCE) have a positive effect on the RoA, while Human Capital Efficiency (HCE) and CEE have a positive impact on RoE. CEE is found to be a highly significant component to explain the financial performance of Indian sugar mill firms.Practical implicationsThe study has practical implications for the policymakers for effective utilization of IC resources for worth enhancement which is essential for the improvement of financial performance.Originality/valueThe research extends the literature of IC by linking it to the financial performance of Indian sugar mill industry.

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Section: Theoretical Motivation Of the Studymentioning

confidence: 99%

Section: Theoretical Motivation Of the Studymentioning

confidence: 99%

Section: Theoretical Motivation Of the Studymentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Relationship between intellectual capital and firm performance: evidence from the Indian sugar mill industry

Sharma,

Verma,

Patil

et al. 2024

IIMTJM

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Sustainability reporting quality and firm value in ASEAN+3: A series moderation model

Van,

Nguyen,

Abu Afifa

et al. 2024

Corp Soc Responsibility Env

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Research on sustainability and firm value has increased recently. However, there is little evidence in this context from ASEAN+3 (i.e., three major Asian economies [South Korea, Japan, and China] and six dynamic economies in the ASEAN region [Indonesia, Malaysia, Singapore, the Philippines, Thailand, and Vietnam]). Therefore, this study explores the impact of sustainability reporting quality on firm value in the ASEAN+3 context. The study also explores the moderating role of environmental, social, and governance (ESG) practices, board gender diversity, board size, and the number of board meetings on the “sustainability reporting quality—firm value nexus.” Data collected from Thomson Reuters Asset4 with a sample size of 923 firms during the period 2019–2023 (4615 firm‐year observations). Regression analysis techniques used include pooled ordinary least squares, fixed effects, and random effects models. The analysis results show new and unique discoveries from ASEAN+3. First, sustainability reporting quality has a positive impact on firm value. Second, ESG practices negatively moderate the “sustainability reporting quality—firm value nexus.” Third, the higher number of board members reduces the “sustainability reporting quality—firm value nexus”; however, the negative level of major economies is lower than that of ASEAN countries. Finally, the firm with more independent female directors strengthens the “sustainability reporting quality—firm value nexus.” This study enriches signaling theory and agency theory by highlighting the complex relationship between components and firm value. To enhance firm value within ASEAN+3, policymakers should prioritize standardized ESG reporting regulations and transparent communication channels; stakeholders must hold managers accountable for genuine ESG implementation and high‐quality reporting; and businesses should prioritize board diversity, particularly independent female directors, alongside sustainability training.

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Environmental, social and governance disclosure and firm value in the energy sector: The moderating role of profitability

Dorothy,

Endri

2024

Problems and Perspectives in Management

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Environmental, social, and governance (ESG) performance is critical in mitigating climate change. Energy companies must include ESG practices in their business plans because they can determine firm value. This study investigates the impact of ESG and firm size on firm value in Indonesian energy sector, which is moderated by profitability through return on assets. This study uses a sample of 19 energy companies listed on the Indonesia Stock Exchange from 2016 to 2022. A panel data regression model is applied to estimate the impact of ESG practices and firm size on firm value with the moderating role of return on assets. The study results found that ecological, social, and governance disclosure in the model with return on assets as a moderator independently positively impacts firm value but not vice versa. The interaction between return on assets and ESG practices has no impact on firm value, which means that the role of return on assets as a moderator cannot strengthen the influence of ESG and firm size on firm value. Return on assets positively impacts firm value if it acts as an independent variable without a moderator. Firm size independently has a negative impact on firm value but has no effect if it interacts with return on assets. The implications of the empirical findings provide recommendations for policymakers, corporate management, investors, and academics. Environmental, social, and governance disclosure practices are essential to pay attention to as they can improve sustainability performance and firm value in the energy sector of Indonesia. AcknowledgmentAcknowledgments are expressed to the Directorate General of Higher Education, Research, and Technology, Ministry of Education, Culture, Research and Technology for the Funding Assistance for the Master’s Thesis Research Grant Scheme [Contract Number: 01-1-4/675/SPK/VII/2024].

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Financial performance, intellectual capital disclosure and firm value: the winning edge

Cited by 6 publications

References 143 publications

Relationship between intellectual capital and firm performance: evidence from the Indian sugar mill industry

Relationship between intellectual capital and firm performance: evidence from the Indian sugar mill industry

Sustainability reporting quality and firm value in ASEAN+3: A series moderation model

Environmental, social and governance disclosure and firm value in the energy sector: The moderating role of profitability

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