The Impact of Intellectual Capital Efficiency on Market Value: An Empirical Study from Iranian Pharmaceutical Companies

Iranian Journal of Pharmaceutical Research, Vol. 11, No. 1, pp. 195-207, 2012

14 Pages Posted: 13 Dec 2012

See all articles by Peyman Akhavan

Peyman Akhavan

Malek Ashtar University of Technology

Gholamhossein Mehralian

Independent

Hamid Reza Rasekh

Shahid Beheshti University of Medical Sciences

Mohammad Reza Sadeh

Iran University of Science and Technology

Multiple version iconThere are 2 versions of this paper

Date Written: December 12, 2012

Abstract

The increasing gap observed between market value and book value of many companies has taken into account towards investigating the impact of intellectual capital (IC) on business performance. IC has been widely considered as a critical tool to deliver the business successfully in an intensive competitive environment. Various models have been suggested to measure the numerous aspects of IC, i.e. the Skandia navigator, Tobin's Q, and value added intellectual coefficient (VAIC). The aim of this study is to examine the relationship between intellectual capital and market value of pharmaceutical companies, using the VAIC developed by Ante Pulic (2000). Six-year data was obtained from audited financial reports in Iranian Exchange Stock, and used to calculate human capital, structural capital, and capital-employed efficiency of pharmaceutical companies. The results obtained using correlation and multiple regression analysis failed to support the impact of IC on market value. Practically, IC efficiency can be applied as a benchmark and strategic indicator to assess firm value. This study is a pioneering attempt in Iran to measure the impact of IC efficiency on market value using cross sectional time series data.

Keywords: intellectual capital, pharmaceuticals industry, Iran, intangible assets, market value

Suggested Citation

Akhavan, Peyman and Mehralian, Gholamhossein and Rasekh, Hamid Reza and Sadeh, Mohammad Reza, The Impact of Intellectual Capital Efficiency on Market Value: An Empirical Study from Iranian Pharmaceutical Companies (December 12, 2012). Iranian Journal of Pharmaceutical Research, Vol. 11, No. 1, pp. 195-207, 2012, Available at SSRN: https://ssrn.com/abstract=2188263

Peyman Akhavan (Contact Author)

Malek Ashtar University of Technology ( email )

Tehran
Iran

Hamid Reza Rasekh

Shahid Beheshti University of Medical Sciences ( email )

Velenjak Street, Shahid Chamran High Way
Tehran
Iran

HOME PAGE: http://en.sbmu.ac.ir/

Mohammad Reza Sadeh

Iran University of Science and Technology ( email )

Tehran
Iran

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