The Valuation of Intellectual Capital
Oliver P. Pfeil
DWS Investments; Universität St. Gallen
March 10, 2003
This paper studies the value relevance of Intellectual Capital by comparing a set of different valuation models. The empirical analysis covers 300 large European companies from 1990 to 2001. Drawing on the Ohlson (1995) and Feltham-Ohlson (1995) model, I define and test the value relevance of an Intellectual Capital earnings measure, providing evidence for the superior explanatory power of this metric compared to other income measures. I also find evidence for the superior explanatory power of a valuation function, based on IC earnings and operating earnings.
Number of Pages in PDF File: 64
Keywords: Valuation, Intellectual Capital, Residual Income, Resource-based view
JEL Classification: M4, G3working papers series
Date posted: May 27, 2003
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