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The performance of intellectual capital

Author

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  • Vijaya Murthy
  • Jan Mouritsen

Abstract

Purpose - This paper aims to analyse the relationship between intellectual capital and financial capital using a case study. This makes it possible to discuss how intellectual capital is related to value creation with a degree of nuance that is absent from most statistical studies of relationships between human, organisational, relational and financial capital. Design/methodology/approach - The paper uses a case study of a firm that invests in intellectual capital in order to develop financial capital. It traces the relationship between intellectual capital elements and financial capital via interviews. This allows the development of a nuanced account of the performance of intellectual capital. This account questions the universality of the linear model typically found in statistical studies. The model makes it possible to show how items of intellectual capital not only interact but also compete. Findings - Relationships between intellectual capital and financial capital are challenging to specify because they are complementary rather than causal. Financial capital is not only an effect but also an important input because the development of intellectual capital takes place through the firm's budgeting processes. Research limitations/implications - The findings suggest future development of accounts of the role and performance (strength) of intellectual capital be developed around imaginative, perhaps recursive and certainly dynamic, statistical models and/or more inclusive case studies of the various elements that influence the development and transformation of intellectual capital. Originality/value - The case study suggests that investments in intellectual capital happen in the context of many other investments. Bounded by the budgeting process, intellectual capital has no separate agenda and therefore, intellectual capital investments compete with other types of investments.

Suggested Citation

  • Vijaya Murthy & Jan Mouritsen, 2011. "The performance of intellectual capital," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 24(5), pages 622-646, June.
    • Handle: RePEc:eme:aaajpp:v:24:y:2011:i:5:p:622-646
    DOI: 10.1108/09513571111139120
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    References listed on IDEAS

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    1. Christopher Ittner, 2008. "Does measuring intangibles for management purposes improve performance? A review of the evidence," Accounting and Business Research, Taylor & Francis Journals, vol. 38(3), pages 261-272.
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    Cited by:

    1. van Erp, Wil & Roozen, Frans & Vosselman, Ed, 2019. "The performativity of a management accounting and control system: Exploring the dynamic relational consequences of a design," Scandinavian Journal of Management, Elsevier, vol. 35(4).
    2. Subhash Abhayawansa & James Guthrie, 2014. "Importance of Intellectual Capital Information: A Study of Australian Analyst Reports," Australian Accounting Review, CPA Australia, vol. 24(1), pages 66-83, March.
    3. repec:hig:wpaper:33man2015 is not listed on IDEAS
    4. Elisabeth Albertini, 2016. "An inductive typology of the interrelations between different components of intellectual capital," Post-Print hal-02139769, HAL.
    5. Christian Nielsen & Gunnar Rimmel & Tadanori Yosano, 2015. "Outperforming markets: IC and the long-term performance of Japanese IPOs," Accounting Forum, Taylor & Francis Journals, vol. 39(2), pages 83-96, June.
    6. Dr. Abdelrazaq Faleh Altal, 2016. "The Impact of Intellectual Capital Disclosure on Market Value: An Empirical Study on Jordanian Pharmaceutical Manufacturing Companies Listed in Amman Stock Exchange," Journal of Social Sciences (COES&RJ-JSS), , vol. 5(3), pages 277-290, July.
    7. Maria Serena Chiucchi & Marco Giuliani & Simone Poli, 2018. "Do Ownership Gender Diversity and Size Matter? A Focus on Intellectual Capital Performance," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(3), pages 1-1, February.
    8. Elena Shakina & Angel Barajas, 2014. "Intangible-Intensive Profile Of A Company: The Key To Outperforming," HSE Working papers WP BRP 22/MAN/2014, National Research University Higher School of Economics.
    9. Corinne Ollier Bessieux & Emmanuelle Negre & Marie-Anne Verdier, 2022. "Moving from Accounting for People to Accounting with People: A Critical Analysis of the Literature and Avenues for Research," Post-Print hal-03889478, HAL.
    10. Muhammad Nadeem & Christopher Gan & Cuong Nguyen, 2018. "The Importance of Intellectual Capital for Firm Performance: Evidence from Australia," Australian Accounting Review, CPA Australia, vol. 28(3), pages 334-344, September.
    11. Tadanori Yosano & Christian Nielson Gunnar Rimmel, 2014. "Japanese IPO Intellectual Capital Information Disclosures and the Effects on their Long-Term Stock Price Performance," Discussion Papers 2014-33, Kobe University, Graduate School of Business Administration.
    12. Xin Long Xu & Hsing Hung Chen & Rong Rong Zhang, 2020. "The Impact of Intellectual Capital Efficiency on Corporate Sustainable Growth-Evidence from Smart Agriculture in China," Agriculture, MDPI, vol. 10(6), pages 1-15, June.
    13. Elena Shakina & Angel Barajas, 2014. "The Changing Role Of Intellectual Resources During The Economic Crisis Of 2008-2009," HSE Working papers WP BRP 17/MAN/2014, National Research University Higher School of Economics.
    14. Chiara Demartini & Sara Trucco, 2016. "Does Intellectual Capital Disclosure Matter for Audit Risk? Evidence from the UK and Italy," Sustainability, MDPI, vol. 8(9), pages 1-19, August.
    15. Hongxing Yao & Muhammad Haris & Gulzara Tariq & Hafiz Mustansar Javaid & Muhammad Aamir Shafique Khan, 2019. "Intellectual Capital, Profitability, and Productivity: Evidence from Pakistani Financial Institutions," Sustainability, MDPI, vol. 11(14), pages 1-30, July.
    16. Elisabeth Albertini & Fabienne Berger-Remy, 2019. "Intellectual Capital and Financial Performance: A Meta-Analysis and Research Agenda," Post-Print hal-02139763, HAL.
    17. Rossi, Cesare & Cricelli, Livio & Grimaldi, Michele & Greco, Marco, 2016. "The strategic assessment of intellectual capital assets: An application within Terradue Srl," Journal of Business Research, Elsevier, vol. 69(5), pages 1598-1603.
    18. Mouritsen, Jan & Kreiner, Kristian, 2016. "Accounting, decisions and promises," Accounting, Organizations and Society, Elsevier, vol. 49(C), pages 21-31.

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