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The dynamic impact of intellectual capital on firm value: evidence from China

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  • Yang Li
  • Zhao Zhao

Abstract

We examine the dynamic relationship between intellectual capital (measured by human capital and organizational capital) and firm value of Chinese listed firms. We do causality identification using system GMM and IV estimation, and find no significant relation between human capital and firm value, but organizational capital positively affects firm value with a lag. Our findings are robust to firms with different property rights, of different sizes, or in different industries, with the only exception of capital-intensive firms, in which human capital has a significant influence on firm value. The results imply that the improvement of organizational system plays a more important role in raising the value of a firm in a typical developing country, like China.

Suggested Citation

  • Yang Li & Zhao Zhao, 2018. "The dynamic impact of intellectual capital on firm value: evidence from China," Applied Economics Letters, Taylor & Francis Journals, vol. 25(1), pages 19-23, January.
    • Handle: RePEc:taf:apeclt:v:25:y:2018:i:1:p:19-23
    DOI: 10.1080/13504851.2017.1290769
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    References listed on IDEAS

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    1. Andrea L. Eisfeldt & Dimitris Papanikolaou, 2013. "Organization Capital and the Cross-Section of Expected Returns," Journal of Finance, American Finance Association, vol. 68(4), pages 1365-1406, August.
    2. Fisman, Raymond & Svensson, Jakob, 2007. "Are corruption and taxation really harmful to growth? Firm level evidence," Journal of Development Economics, Elsevier, vol. 83(1), pages 63-75, May.
    3. Wintoki, M. Babajide & Linck, James S. & Netter, Jeffry M., 2012. "Endogeneity and the dynamics of internal corporate governance," Journal of Financial Economics, Elsevier, vol. 105(3), pages 581-606.
    4. Lin, Yi-Mien & Lee, Chih-Chen & Chao, Chin-Fang & Liu, Chih-Liang, 2015. "The information content of unexpected stock returns: Evidence from intellectual capital," International Review of Economics & Finance, Elsevier, vol. 37(C), pages 208-225.
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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. Jawad Asif & Irene Wei Kiong Ting & Qian Long Kweh, 2021. "Intellectual Capital Investment and Firm Performance of the Malaysian Energy Sector - A New Perspective From a Nonlinearity Test," Energy RESEARCH LETTERS, Asia-Pacific Applied Economics Association, vol. 1(1), pages 1-4.
    3. Pearl Abredu & Cai Li & Frank Kofi Essien & Isaiah Agbenu Akanbi Adegoke, 2023. "Unleashing Potential: Overcoming Bottlenecks and Catalyzing Innovations in Intellectual Capital Intellectualization of Small and Medium-Sized Enterprises in Jiangsu During the Post-Industrial Era," SAGE Open, , vol. 13(4), pages 21582440231, December.
    4. DasGupta, Ranjan & Roy, Arup, 2023. "Firm environmental, social, governance and financial performance relationship contradictions: Insights from institutional environment mediation," Technological Forecasting and Social Change, Elsevier, vol. 189(C).
    5. Muhammad Imran Nazir & Yong Tan & Muhammad Rizwan Nazir, 2021. "Intellectual capital performance in the financial sector: Evidence from China, Hong Kong, and Taiwan," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 6089-6109, October.

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