Intellectual Capital Evaluation: Relationship between Knowledge Management Implementation and Company’s Performance

Abstract

Knowledge management is becoming the most relevant and challenging issue of company’s strategy implementation in the new economy. Intellectual capital identification and evaluation is one of the most important issues in knowledge management. Our study focuses on the evaluating intellectual capital methods that allow finding out the most efficient way of intellectual capital management, including investment decision making. We suppose that the potential effectiveness of intellectual capital resources varies depending on a company size, industry and country. The majority of the relevant researches are based on resource- and value-based approaches that separately analyze the intellectual capital from a certain point of view, limiting the number of problems at concurrence of these concepts. Therefore, to solve problems of intellectual capital evaluation we integrate two approaches that are relevant for studying the companies’ and industries’ behavior.

We seek to integrate two approaches to answer following questions: Is there a close relationship between an intellectual capital quality and a company performance: a creation and destruction of the enterprise value due to intellectual capital employed? What are the external and internal factors affecting this relationship (country, industry, company size, market dynamics, etc.)? Is there a certain complementarity of the intellectual capital separate components (human, institutional and market resources)?

Despite the large empirical background the intellectual capital management issues fundamentally are not well studied. The purpose of this research is the development of cost-effectiveness tools for analyzing the company’s intellectual resources. Several statistical methods should be provided for the empirical issues of this research, including common cross-sectional and panel data analysis. The data base collected for this purpose will consist of financial and economic indicators underlying the intellectual capital evaluation, for example, strategic performance indicators (EVA, FGV, Q-Tobin). It should be emphasized, that a number of required data are quite specific and hardly observed. Thus, the data base of this research founds on the annual statistical and financial reports including the description of some qualitative characteristics of analyzed companies and industries: total labor productivity, staff education level, customer loyalty, product range, R&D expenditures, participation in business associations, co-operative innovation projects, localization and specialization coefficients, and others. This paper is devoted to the research problem identification and motivation and also presents some empirical results.

Keywords: intellectual capital inputs and outcomes, economic value added

JEL Classification: O12, O15, O16, O34, O57