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The Impact of Corporate Governance on Intellectual Capital. Empirical Evidence from Romanian Companies

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  • LUCUȚ CAPRAȘ Isabella
  • RUS Alexandra Ioana Daniela
  • ACHIM Monica Violeta

Abstract

This study aims to analyse the effects of corporate governance on the intellectual capital of companies. The sample is composed of 64 companies listed on the Bucharest Stock Exchange in the time span 2016-2021. The data were collected from companies' annual reports and from Thomson Reuters database. In this way, we investigated the relationship between corporate governance, measured as the compliance with the Bucharest Stock Exchange Code of Corporate Governance, and intellectual capital, measured by two different methods: Economic Value Added (EVA) and Value Added Intellectual Coefficient (VAIC). The results showed that there is a positive and statistically significant relationship between intellectual capital and corporate governance. The main results of our study indicate that there is a positive and statistically significant relationship between corporate governance and intellectual capital in all the cases. Furthermore, all the control variables, namely total assets, employee number, and leverage, show positive and statistically significant results. It has been found that intellectual capital and good corporate governance practices can contribute to the wealth creation of firms. Strategic planning, organisation, transparency, and accountability are the cornerstones of a good corporate governance system. These elements improve the quality of the internal control and risk management processes and increase investors’ and other stakeholders' trust. The importance of intellectual capital has been acknowledged by companies as a vital component of their competitive advantage. The outcomes of the present study can be used by policymakers in order to increase the efficiency of companies and to determine the need to invest in human capital.

Suggested Citation

  • LUCUȚ CAPRAȘ Isabella & RUS Alexandra Ioana Daniela & ACHIM Monica Violeta, 2023. "The Impact of Corporate Governance on Intellectual Capital. Empirical Evidence from Romanian Companies," European Journal of Interdisciplinary Studies, Bucharest Economic Academy, issue 01, March.
    • Handle: RePEc:jis:ejistu:y:2023:i:01:id:521
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    References listed on IDEAS

    as
    1. Sushila Soriya & Narender Kumar, 2022. "Association of Corporate Governance with Intellectual Capital Performance: A Study of S&P 200 Companies," Journal of Information & Knowledge Management (JIKM), World Scientific Publishing Co. Pte. Ltd., vol. 21(01), pages 1-20, March.
    2. Justyna Franc-Dąbrowska & Magdalena Mądra-Sawicka & Anna Milewska, 2021. "Energy Sector Risk and Cost of Capital Assessment—Companies and Investors Perspective," Energies, MDPI, vol. 14(6), pages 1-20, March.
    3. Ranjith Appuhami & Mohammed Bhuyan, 2015. "Examining the influence of corporate governance on intellectual capital efficiency," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 30(4/5), pages 347-372, May.
    4. Khuram Shahzad & Syed Quaid Ali Shah & Fong-Woon Lai & Ahmad Ali Jan & Syed Azmat Ali Shah & Muhammad Kashif Shad, 2023. "Exploring the nexus of corporate governance and intellectual capital efficiency: from the lens of profitability," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(3), pages 2447-2468, June.
    5. Mahmoud Lari Dashtbayaz & Mahdi Salehi & Alieyh Mirzaei & Hamideh Nazaridavaji, 2020. "The impact of corporate governance on intellectual capitals efficiency in Iran," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 13(4), pages 749-766, July.
    6. Mahmoud Lari Dashtbayaz & Mahdi Salehi & Alieyh Mirzaei & Hamideh Nazaridavaji, 2020. "The impact of corporate governance on intellectual capitals efficiency in Iran," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 13(4), pages 749-766, July.
    7. Nicolae Sichigea & Laura Vasilescu, 2015. "Economic Value Added And Market Value Added - Modern Indicators For Assessment The Firm’S Value," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 6, pages 488-493, December.
    8. Nicolae Sichigea & Laura Vasilescu, 2015. "Economic Value Added And Market Value Added - Modern Indicators For Assessment The Firm’S Value," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 0, pages 488-493, December.
    9. repec:eme:maj000:maj-04-2014-1022 is not listed on IDEAS
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    More about this item

    Keywords

    corporate governance; intellectual capital; value added;
    All these keywords.

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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