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Value relevance on intellectual capital valuation methods: the role of corporate governance

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  • Mao-Chang Wang

Abstract

Development of a knowledge economy has changed the main value of a firm from traditional physical assets to intellectual capital or intangible assets. Therefore, the accumulation and management of intellectual capital is the competitive advantage of knowledge-based industries. Intellectual capital valuation is the essential factor in firm valuation. Scholars have presented valuation methods of intellectual capital, such as Tobin’s Q, Knowledge Capital Earnings (KCE), and Value Added Intellectual Coefficient (VAIC). Management power of modern firms is separate from ownership, and easily occurs in the agency problem; therefore, firms must implement corporate governance to solve this problem. Researchers have presented that a complete appraisal of the firm value includes the effect of corporate governance. This study is the first to apply multi-regression models to examine value relevance on valuation methods of intellectual capital, and to further analyze the role of corporate governance for the information and electronic industry in Taiwan. The results show that Tobin’s Q, KCE, and VAIC have a positive relationship to firm value. The characteristic of director board, including board size, the ratio of outside directors, employed independent directors, and the manager concurrently the director, are correlated with the valuation of intellectual capital. Copyright Springer Science+Business Media B.V. 2013

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  • Mao-Chang Wang, 2013. "Value relevance on intellectual capital valuation methods: the role of corporate governance," Quality & Quantity: International Journal of Methodology, Springer, vol. 47(2), pages 1213-1223, February.
    • Handle: RePEc:spr:qualqt:v:47:y:2013:i:2:p:1213-1223
    DOI: 10.1007/s11135-012-9724-1
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    3. Mohammad Nourani & VGR Chandran & Qian Long Kweh & Wen-Min Lu, 2018. "Measuring Human, Physical and Structural Capital Efficiency Performance of Insurance Companies," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 137(1), pages 281-315, May.
    4. Andrea Krýslová, 2018. "Development of Changes in Corporate Governance Considering Its Non-Financial Factors through the Companies´ and Investors´ Lens," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 7(4), pages 225-235, November.
    5. Bharathi Kamath, 2019. "Impact of corporate governance characteristics on intellectual capital performance of firms in India," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 16(1), pages 20-36, March.
    6. 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.
    7. Arturo Leccadito & Stefania Veltri, 2015. "A regime switching Ohlson model," Quality & Quantity: International Journal of Methodology, Springer, vol. 49(5), pages 2015-2035, September.
    8. Jian Xu & Binghan Wang, 2019. "Intellectual Capital Performance of the Textile Industry in Emerging Markets: A Comparison with China and South Korea," Sustainability, MDPI, vol. 11(8), pages 1-16, April.

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