R.J. Burgman, G. Roos, J.J. Ballow and R.J. Thomas
The purpose of this paper is to describe the logic and processes for identifying, measuring and managing intellectual capital resources along side traditional economic resources…
Abstract
Purpose
The purpose of this paper is to describe the logic and processes for identifying, measuring and managing intellectual capital resources along side traditional economic resources to achieve sustainable outcomes valued by investors.
Design/methodology/approach
The approach is founded on classical finance theory and draws on and multi‐attribute value theory, system dynamics and the strands of thought known as intellectual capital in order to produce a grounded framework that both produces reliable results as well as achieves acceptance in the financial community.
Findings
The findings from this approach, the FVMT Methodology, provide a comprehensive management framework that is agnostic as to the form of resources being utilized and the activities that are involved in the transformation of one resource form into another on the way to achieving sustainable outcomes valued by investors.
Research limitations/implications
Whilst the approach has proven to work well the limitations are that it requires both effort and access to market makers.
Practical implications
The implications is that for the first time an approach is now available that provides the same rigor for managing the future value component of a firm's share price as there already exist for managing the current value component of the firm's share price. This means that managers can both reduce the volatility surrounding their share price as well as predict the value outcomes of a given set of actions.
Originality/value
The authors believe that this is the first presentation of a methodology grounded in classical finance theory for the managing of the future value component of a firm's share price.
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John J. Ballow, Roland Burgman and Michael J. Molnar
When it comes to increasing shareholder value, the management team faces difficult issues in executing growth strategies. The authors explore the three most important shareholder…
Abstract
When it comes to increasing shareholder value, the management team faces difficult issues in executing growth strategies. The authors explore the three most important shareholder value management factors: managing not only for current operations but for future growth; accounting for and managing intangible assets, one of the key drivers of value in today’s economy; and deciding where to invest resources given the inability of current tools to provide a reliable link between investments and the creation of shareholder value.
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Norhayati Mat Husin, Keith Hooper and Karin Olesen
The purpose of this paper is to provide an analysis of intellectual capital (IC) disclosures in annual reports (mandatory and voluntary) and draw attention to the specific issues…
Abstract
Purpose
The purpose of this paper is to provide an analysis of intellectual capital (IC) disclosures in annual reports (mandatory and voluntary) and draw attention to the specific issues related to the methodology used i.e. content analysis. The focus is to incorporate all forms of IC disclosure – narratives, numbers, and visual images – into the analysis as well as highlight the need to study both quantity (extent) and quality of disclosure.
Design/methodology/approach
Using content analysis, this paper analyzes 30 of Malaysia's largest public‐listed companies from the IC disclosure of 2008 annual reports. The results are used to discuss specific methodological issues such as the usage of an IC index, choice of unit of analysis, quantity versus quality, presence/absence versus multiple disclosures, and the usage of narratives, numbers, and visual images.
Findings
This paper proposes that themes are the most appropriate recording and counting unit to analyze IC information combining narratives, numbers, and visual images. The discussion finds, among others, that while quantity and quality are highly related, quality of disclosure provides the most insights into the disclosure behavior adopted by companies.
Practical implications
This paper provides methodological guidelines to future IC researchers interested in analyzing the quantity and quality of IC disclosure.
Originality/value
To the best of the authors' knowledge, so far there are no studies published that provide a detailed discussion on ways to capture the quantity and quality of IC information disclosed in annual reports using all three forms of disclosure – narratives, numbers, and visual images.
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Stéphane Renaud, Lucie Morin, Jean-Yves Saulquin and Jocelyne Abraham
The purpose of this paper is to answer the following two questions: What are the HRM practices that have a significant impact on employees’ functional retention?, and Does the…
Abstract
Purpose
The purpose of this paper is to answer the following two questions: What are the HRM practices that have a significant impact on employees’ functional retention?, and Does the impact of these HRM practices on functional retention differ based on the employee’s status as an expert or a non-expert? Our theoretical foundation rests on human capital theory and social exchange theory.
Design/methodology/approach
This study uses longitudinal data that come from multiple surveys conducted on new employees within a Canadian subsidiary of an international information technology (IT) firm.
Findings
Results show that four out of five HRM practices under study have a significant and positive impact on functional retention of employees regardless of their expert status: satisfaction with a respectful and stimulating work environment, satisfaction with training and development, satisfaction with innovative benefits and satisfaction with incentive compensation significantly increase functional retention of employees. Functional retention was found to be higher for experts than for their non-expert counterparts. Last, results show that expert/non-expert status play a moderating role between HRM practices and functional retention.
Originality/value
In short, this study offers five main contributions to the literature: first, it focuses on retention rather than turnover; second, it goes further by examining functional retention as the dependant variable; third, it distinguishes between two categories of employees: experts and non-experts; fourth, it extends the limited literature on IT workers, HRM practices and retention; and fifth, it is based on longitudinal data whereas the overwhelming majority of published studies have been based on cross-sectional data.
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Nischay Arora, Ridhima Saggar and Balwinder Singh
The study aims to explore the unexplored domain by examining the impact of risk disclosure on corporate reputation in an emerging economy, like India, characterized by huge…
Abstract
Purpose
The study aims to explore the unexplored domain by examining the impact of risk disclosure on corporate reputation in an emerging economy, like India, characterized by huge information asymmetry and uncertainty.
Design/methodology/approach
In total two measures of corporate reputation, i.e. market capitalization and excess of market value over book value have been deployed to measure reputation. Automated content analysis has been executed to measure the extent of total risk disclosure. The empirical analysis is premised on a sample of S&P BSE-100 index spanning over the period of ten years from 2009–2010 to 2018–2019; which eventually gets reduced to 58 nonfinancial firms. In order to unearth the risk–reputation relationship, a panel regression technique has been employed.
Findings
The main findings unmask that corporate risk disclosure has a positive bearing on corporate reputation. Substantiating legitimacy theory, its alternative measures like market capitalization and excess of market value over book value divulged to positively influence corporate reputation.
Research limitations/implications
The study has certain limitations: since there is no standard method of measuring reputation, the results may vary subject to the changes in proxies of corporate reputation. The study also analyzed S&P BSE 100 index in India, and future research needs to approach a larger sample and in other emerging economies to fill up enough empirical evidence in this domain.
Practical implications
The findings provide insight into the managers on making higher divulgence of material risk information for augmenting corporate reputation. In other words, it indirectly propels the firm to exhibit higher risk information for building reputational capital. From the investor's standpoint, they should admire such firms which dispel more risk information and should have positive outlook toward them, which in turn prompts them to disclose more risks.
Originality/value
This study is unique as it is the first longitudinal study examining the impact of risk disclosure on corporate reputation in Indian settings. It, thus, assists in furthering the risk disclosure literature where there is hardly any study that comprehensively looks into risk–reputation liaison among Indian nonfinancial companies.
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Norhana Salamudin, Ridzwan Bakar, Muhd Kamil Ibrahim and Faridah Haji Hassan
This study examines the intangible assets value of the Malaysian market. It measures the relationship between intangible assets and corporate market value of Malaysian firms and…
Abstract
Purpose
This study examines the intangible assets value of the Malaysian market. It measures the relationship between intangible assets and corporate market value of Malaysian firms and whether they are consistent with findings in other advanced markets.
Design/methodology/approach
Firstly, the development of intangible assets of Malaysian companies over 2000 to 2006 were measured statistically using Landsman's balance sheet identity model. Then, cross‐sectional multi‐regression procedure was used to ascertain the relationship between intangible assets and financial performance.
Findings
The findings reveal that the Malaysian market developed intangible assets at a rather slow pace, with significant development from year 2004 onwards. It also reveals that the book value of net assets (BVNA) are still dominant in Malaysian corporate valuation but this trend is declining as greater interest has now been developed in employing intangible assets and earnings as important variables. Furthermore, the results indicate that there is a positive trend in intangible assets development in Malaysia, consistent with those of advanced markets such as the US, Europe and Australia. However, the Malaysian market lags by about 20 years as compared to the more advanced ones.
Research limitations/implications
The limitations of this paper are as follows: the time frame for this study was seven years and it looked at the post‐financial crisis period. A longer time frame may be desirable covering both pre‐ and post‐crisis periods. Secondly, this study did not look into intangible assets at the micro‐level perspective. Unless solid definition, classification, measurement and valuation of intangible assets have been ascertained, it is not worth dwelling on individual assets, such as brand, research and development (R&D), and human capital.
Originality/value
The main contribution of this study is that it provides empirical evidence that intangible assets or intellectual assets are strategic assets that require close attention in line with development of the knowledge‐based economy.
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Abdifatah Ahmed Haji and Sanni Mubaraq
This paper longitudinally examines the intellectual capital (IC) disclosure practices of Nigerian banks following the restructuring exercise and the subsequent policy changes in…
Abstract
Purpose
This paper longitudinally examines the intellectual capital (IC) disclosure practices of Nigerian banks following the restructuring exercise and the subsequent policy changes in the Banking sector.
Design/methodology/approach
Content analysis of annual reports of the banks was carried out over a period of four years (2006‐2009), a period following the consolidation exercise and the subsequent introduction of the mandatory code of corporate governance. A self‐constructed IC disclosure checklist was used to measure the extent of IC information disclosed in the annual reports. A number of statistical techniques were performed to assess the trend of IC disclosures and compare the IC disclosure categories.
Findings
The results show that the overall IC disclosures of the Nigerian banks increased moderately over the four year period. Human and internal capital disclosures dominated the banks' IC disclosures, with only internal capital disclosures showing a significant increasing trend over time.
Research limitations/implications
The increasing trend of IC disclosures of the banks suggests that the introduction of the mandatory code of corporate governance had positive implications on IC reporting practices. Hence, the findings of this study give support to previous research that established a strong positive association between IC disclosures and corporate governance development. However, this study only examines the IC disclosures of Nigerian banks following the reformation of the banking sector. Future research should incorporate other countries experiencing similar regulatory changes.
Practical implications
The introduction of the corporate governance code might have positively influenced the IC disclosure practices of the banks. However, the results had shown that the IC disclosures were mainly inconsistent and discursive in nature. Hence, the regulatory authorities, accounting setters and other relevant government agencies may wish to devise a detailed IC reporting framework for the banking sector.
Originality/value
Despite the significance of the banking sector to any economy, the IC disclosure practices of the banks largely remained unexplored. This study provides a much needed longitudinal assessment of the IC disclosures in the case of Nigerian banks following a major consolidation exercise and the introduction of a mandatory code of corporate governance specifically designed for the banks. The study also represents the first empirical investigation of IC reporting practices in Nigeria.
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The purpose of this paper is to tie together the insights from the body of research relating to economic complexity theory, structural holes, non-price based competition, and…
Abstract
Purpose
The purpose of this paper is to tie together the insights from the body of research relating to economic complexity theory, structural holes, non-price based competition, and knowledge management. The insights relating to generating national prosperity are synthesised through an intellectual capital lens.
Design/methodology/approach
The paper uses literature review combined with insights from an Australian project on state-based economic complexity.
Findings
The connectivist and autopoietic epistemological paradigms are found to be most aligned with the need to manage transformation between organisational and human resources that will achieve causal ambiguity and hence inimitability. This inimitability forms the basis for achieving non-price based competition and if there is a rich network of economic agents that, both individually and collectively through collaboration, have these characteristics a large share of the economy can operate on the basis of non-priced based competition. If all these agents have an export focus the economic complexity of the economy will be high, and likely increasing, which will enable both the creation and the appropriation of large amounts of value and hence result in increasing national prosperity.
Research limitations/implications
Findings are only relevant for OECD countries given the origins of the data used.
Practical implications
Managerial implications are outlined as are major implications for public policy.
Originality/value
This is the first time that these concepts are linked.
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This study investigated the effect of voluntary cybersecurity risk reporting (VCRR) on corporate reputation. By examining the association between VCRR and corporate reputation…
Abstract
Purpose
This study investigated the effect of voluntary cybersecurity risk reporting (VCRR) on corporate reputation. By examining the association between VCRR and corporate reputation, this study aims to provide exploratory evidence of how cybersecurity risk is sensitive to a company’s image and reputation.
Design/methodology/approach
An automated content analysis of VCRR by 95 Bombay Stock Exchange-listed companies was undertaken using Python code. Signaling and legitimacy theories were adopted to interpret the findings, establishing whether VCRR was related to corporate reputation.
Findings
The results confirm that VCRR improves the corporate reputation in the financial market. The results also confirm the signalling and legitimacy theory that a company can manage reputational risks through higher voluntary risk disclosure.
Practical implications
The corporation’s managers can gain insights from the study’s findings and proactively address cybersecurity risks through strategic disclosure and management practices. In addition, organizations can recognize that investors value transparency and establish a positive reputation for those who communicate openly.
Social implications
A significant association between VCRR and corporate reputation implies that such disclosures enhance trust and transparency in the business sector and induce security and accountability among investors engaging with the company.
Originality/value
To the best of the authors’ knowledge, this study is the first that empirically investigates this issue and adds to the international literature a new explanatory variable, corporate reputation, to explain VCRR practices.
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Petra Bouvain, Chris Baumann and Erik Lundmark
This study compares the associations between Corporate Social Responsibility (CSR) and brand value in the financial services industry in East Asia and the USA.
Abstract
Purpose
This study compares the associations between Corporate Social Responsibility (CSR) and brand value in the financial services industry in East Asia and the USA.
Design/methodology/approach
A sample of 84 major banks in East Asia (China, Hong Kong, Japan, South Korea and Taiwan) and the USA is used to test the links between CSR and brand value using ANOVA and multiple regressions.
Findings
Brand value is positively related to CSR for the entire sample, but is associated with distinctively different CSR factors depending on the geographic markets. In Japan and South Korea brand value is associated with a bank's appreciation for its employees, while in China, brand value is linked to a focus on the community. East Asia's culture is rooted in Confucianism, a philosophy that emphasises caring for the “greater good” (i.e. for the community) and for one's subordinates. In contrast, Americans are more concerned with “green” issues, and subsequently caring for the environment is associated with brand value. In addition, corporate governance, or regulatory compliance, has a strong relationship with brand value for American banks.
Research limitations/implications
The study emphasises the complexity of global brand management given that eastern and western companies exhibit distinct patterns regarding brand value. Specifically, our study shows that the links between CSR and brand value vary substantially between different countries and regions.
Originality/value
This study investigates the association between CSR and brand value and establishes that different CSR aspects are linked to brand value for banks in East Asia and the USA. The study also establishes that CSR is not a universal concept, given that such distinct brand value‐CSR links have been found for the different geographic markets under investigation.