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Intellectual Capital and Its Impact on the Financial Performance of Russian Manufacturing Companies

Author

Listed:
  • Tatiana Andreeva

    (Maynooth University (Ireland))

  • Tatiana Garanina

    (St. Petersburg University (Russian Federation))

Abstract

Intellectual Capital (IC) has been argued to be the key element of value creation in the contemporary economy. According to the results obtained in [Molnar, 2004] in the 1980s the share of tangible assets accounted for about 62% of market capitalization of companies on developed markets. However, by the start of the 2000s, their share fell to 16%. This has been widely supported by empirical research, but mainly based on the data from developed markets. The questions of how IC and its elements work on emerging markets remains under-researched due to a lack of empirical research devoted to this topic. The aim of the study is to provide empirical insight into the relationship between three main elements of IC (human, relational and organisational) and organisational performance of Russian companies, such as asset profitability, net sales growth and market share. The sample includes 240 Russian companies. Information about different elements of intellectual capital has been gathered with the help of a questionnaire that has been answered by the executive management of the companies included in the sample over the course of January-March 2015. The data is collected with the survey using the scales that have been already internationally. The findings based on regression analysis demonstrate that structural and human capital positively influence organisational performance, while relational capital does not. We can assume that the results that we obtained can be explained by the specific features of the analyzed industries. For manufacturing companies the organizational structure and the effectiveness of internal processes play a much more important role in company value creation than relations with customers and other stakeholders. The core managerial implication of this study is that building the structural capital, providing employees with efficient and relevant information systems and tools to support cooperation between employees, as well as carefully documenting organizational knowledge and making it easily accessible for employees, should be in the focus of the managers of manufacturing companies. The concept of IC management in our article is developed within the international context and focuses on emerging markets. At the end of the paper, the main areas for further research are presented.

Suggested Citation

  • Tatiana Andreeva & Tatiana Garanina, 2017. "Intellectual Capital and Its Impact on the Financial Performance of Russian Manufacturing Companies," Foresight and STI Governance (Foresight-Russia till No. 3/2015), National Research University Higher School of Economics, vol. 11(1), pages 31-40.
    • Handle: RePEc:hig:fsight:v:11:y:2017:i:1:p:31-40
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    References listed on IDEAS

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    1. Sydler, Renato & Haefliger, Stefan & Pruksa, Robert, 2014. "Measuring intellectual capital with financial figures: Can we predict firm profitability?," European Management Journal, Elsevier, vol. 32(2), pages 244-259.
    2. Kira Kristal Reed & Michael Lubatkin & Narasimhan Srinivasan, 2006. "Proposing and Testing an Intellectual Capital‐Based View of the Firm," Journal of Management Studies, Wiley Blackwell, vol. 43(4), pages 867-893, June.
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    5. Volkov, Dmitry L. & Garanina, Tatiana A., 2007. "Intellectial capital valuation: Case of Russian companies," Working Papers 857, Graduate School of Management, St. Petersburg State University.
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    Cited by:

    1. Lujing Liu & Jiyue Zhang & Jian Xu & Yiqun Wang, 2022. "Intellectual Capital and Financial Performance of Chinese Manufacturing SMEs: An Analysis from the Perspective of Different Industry Types," Sustainability, MDPI, vol. 14(17), pages 1-17, August.
    2. Salim Muhammad OGAJI, 2019. "Employees’ Competence And Business Performance: A Study Of Selected Hotels In Keffi," Business Excellence and Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 9(4), pages 5-17, December.
    3. Putri, Indah Ayu Johanda, 2023. "Growth, Intellectual Capital, Financial Performance And Firm Value : Evidence From Indonesia Automotive Firms," OSF Preprints z53mf, Center for Open Science.
    4. Carlos M. Jardon & Xavier Martinez Cobas, 2023. "Emerging economies and investment in intellectual capital in crisis time: The case of Russia," Russian Journal of Economics, ARPHA Platform, vol. 9(1), pages 57-70, April.
    5. Nadezhda N. Pokrovskaia & Olga N. Korableva & Lucio Cappelli & Denis A. Fedorov, 2021. "Digital Regulation of Intellectual Capital for Open Innovation: Industries’ Expert Assessments of Tacit Knowledge for Controlling and Networking Outcome," Future Internet, MDPI, vol. 13(2), pages 1-28, February.

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    More about this item

    Keywords

    intellectual capital; elements of intellectual capital; companies’ performance; manufacturing sector; Russia;
    All these keywords.

    JEL classification:

    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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