An Empirical Investigation of the Relationship between Intellectual Capital and Firms’ Market Value and Financial Performance

Journal of Management, Vol. 17, No. 1, pp. 99-120, 1991

Ivey Business Journal (formerly Business Quarterly), pp. 40-47, Summer 1996

18 Pages Posted: 16 Feb 2010 Last revised: 20 Apr 2010

See all articles by Ming-Chin Chen

Ming-Chin Chen

National Chengchi University (NCCU) - Department of Accounting

Shu-Ju Cheng

affiliation not provided to SSRN

Yuhchang Hwang

Arizona State University (ASU) - School of Accountancy; China Europe International Business School

Date Written: February 16, 2005

Abstract

The objective of this paper is to investigate the relationship between the value creation efficiency and firms’ market valuation as well as financial performance, using data drawn from Taiwanese listed companies. Our results support the proposition that intellectual capital has a positive impact on corporate market value and financial performance, and may be a leading indicator for future financial performance. In addition, we also found investors may place different value on the three components of value creation efficiency (physical capital, human capital and structural capital). Finally, our results suggest that R&D expenditure may capture information on structural capital and has a positive effect on firm value and profitability.

Suggested Citation

Chen, Ming-Chin and Cheng, Shu-Ju and Hwang, Yuhchang, An Empirical Investigation of the Relationship between Intellectual Capital and Firms’ Market Value and Financial Performance (February 16, 2005). Journal of Management, Vol. 17, No. 1, pp. 99-120, 1991 . Available at SSRN: https://ssrn.com/abstract=1553893

Ming-Chin Chen (Contact Author)

National Chengchi University (NCCU) - Department of Accounting ( email )

No. 64, Sec 2
Chih-Nan Road
Wenshan, Taipei
Taiwan

Shu-Ju Cheng

affiliation not provided to SSRN ( email )

Yuhchang Hwang

Arizona State University (ASU) - School of Accountancy ( email )

Tempe, AZ 85287
United States

China Europe International Business School ( email )

Shanghai-Hongfeng Road
Shanghai 201206
Shanghai 201206
China

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