11 Pages Posted: 22 Mar 2010
Date Written: March 15, 2010
Given the findings that the market value of companies has been presenting some reasonable discrepancies when compared with its book value, mainly in the last two decades, researchers have sought answers to the causes of those disparities. There is consensus that one of the reasons for the signifcant differences in the amounts of market value and book value is due to intangibles that are not included in the balance sheet of companies. One of the intangible assets deemed to be relevant is intellectual capital and the aim of this study was to test variations of Ohlson model for public companies operating in Brazil. The sample for this study is compound by companies whose stocks are traded at the São Paulo Stock Exchange (BMF-BOVESPA). Information about the relevant variables has been researched for the years from 2003 up to 2007, and the main source has been the Economática data basis. Particularly the variable concerning the number of employees has been picked up from Bloomberg’s data basis.
Intellectual capital is a construct (variable not observed directly) whose components are human capital, relational capital, and organizational capital. The variables chosen for the human capital were the number of employees (Func), sales per number of employees (V_Func), and the net profit per number of employees (LL_Func); for the relational capital, which has adapted to customer capital as it is clarified in the methodology, it was the sales growth rate (TCres); and, for the organizational capital, which has adapted to process capital as it is clarified in the methodology, they were the sales and administrative expenses by number of employees (DAV_Func), and the administrative expenses by number of employees (DA_Func). The statistical procedures have been developed through five models, in which the independent variable was the value added (VA): 1 - control variable: net profit (LL); 2 - human capital: (Func), (V_Func), (LL_Func); 3 - customer capital: (TCres); 4 - process capital: (DAV_Func), (DA_Func); 5 - human, customer and process capital: (LL), (Func), (V_Func), (LL_Func), (TCres), (DAV_Func), (DA_Func). The main results indicate that model 1 which evaluates the relationship between the value added by the company and its net profit is corroborated. Model 2 which includes variables linked to human capital does not provide a substantially better result than the first model. Model 3 which evaluates whether the value creation can be explained by a variable linked to customer capital was corroborated just for one year (2007). Model 4 which evaluates the impact of process capital variables on the value creation was corroborated just for one year (2006). Model 5, which embodies simultaneously in the regression all the variables of human capital, customer capital, and process capital to explain value added, indicates a significant influence of several intangible variables on value creation.
Keywords: intellectual capital, value added, human capital, customer capital, process capital, relational capital, organizational capital, book value
JEL Classification: C33, D21, D23, D46, I20, I21, I22, M20, M21
Suggested Citation: Suggested Citation
Nogueira, Cid Garcia and Kimura, Herbert and Junior, Lucas Barros and Basso, Leonardo Cruz, The Impact of Intellectual Capital on Value Added for Brazilian Companies Traded at the BMF-BOVESPA (March 15, 2010). Available at SSRN: https://ssrn.com/abstract=1571576 or http://dx.doi.org/10.2139/ssrn.1571576
By Oliver Pfeil