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The value relevance of intellectual capital on the firm's market value: an empirical survey on the Italian listed firms

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  • Olga Ferraro
  • Stefania Veltri

Abstract

The purpose of the paper is to investigate the value relevance of intellectual capital (IC) of Italian listed firms. The paper applies the Ohlson model (1995) to 524 firm-year observations of Italian listed companies for the three-year period 2006-2008 using a panel econometric model. The findings show that the fundamental variables of the Ohlson model (book value and earning) are positively related to the market value. On the contrary, the IC variables, which reflect human capital, innovation capital, process capital and relation capital, do not have a meaningful relation with the market value, except for the last one. Concluding, Italian investors do not seem to be able to detect and incorporate the information on IC as represented in the IC proxies chosen for the research into their business valuation process.

Suggested Citation

  • Olga Ferraro & Stefania Veltri, 2011. "The value relevance of intellectual capital on the firm's market value: an empirical survey on the Italian listed firms," International Journal of Knowledge-Based Development, Inderscience Enterprises Ltd, vol. 2(1), pages 66-84.
    • Handle: RePEc:ids:ijkbde:v:2:y:2011:i:1:p:66-84
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    Citations

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    Cited by:

    1. Stefano Fontana & Daniela Coluccia & Silvia Solimene, 2019. "VAIC as a Tool for Measuring Intangibles Value in Voluntary Multi-Stakeholder Disclosure," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 10(4), pages 1679-1699, December.
    2. María Dolores García-Gallo & Félix Jiménez-Naharro & Miguel Torres-García & Susan L. Giesecke & José Guadix-Martín, 2020. "Incorporation of the Intangibles into the Spanish Start-Ups by Activity Sector and Region. Improving Their Economic Sustainability," Sustainability, MDPI, vol. 12(10), pages 1-20, May.
    3. Hsiao, Shu-Hua, 2014. "PTE, innovation capital and firm value interactions in the biotech medical industry," Journal of Business Research, Elsevier, vol. 67(12), pages 2636-2644.
    4. Ahmed Jinjiri Bala & Aminu Hassan & Kabiru Isa Dandago & Attahir Babaji Abubakar & Zaharaddeen Salisu Maigoshi, 2021. "On the relationship between intellectual capital efficiency and firm value: evidence from the Nigerian oil and gas downstream sector," International Journal of Learning and Intellectual Capital, Inderscience Enterprises Ltd, vol. 18(3), pages 222-251.
    5. Vincenzo Scafarto & Tamanna Dalwai & Federica Ricci & Gaetano della Corte, 2023. "Digitalization and Firm Financial Performance in Healthcare: The Mediating Role of Intellectual Capital Efficiency," Sustainability, MDPI, vol. 15(5), pages 1-16, February.
    6. Anna Maria Biscotti & Eugenio D?Amico & Sabato Vinci, 2019. "The effectiveness of intellectual capital disclosure in market assessments of corporate value creation," FINANCIAL REPORTING, FrancoAngeli Editore, vol. 2019(1), pages 5-35.

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