The Relationship between Intellectual Capital (IC) and Stock Market Performance: Empirical Evidence from Italy

Journal of Modern Accounting and Auditing, November 2012, Vol. 8, No. 11, pp. 1729-1741

13 Pages Posted: 19 Dec 2012 Last revised: 3 May 2013

See all articles by Fabrizio Rossi

Fabrizio Rossi

University of Cassino and Southern Lazio

Domenico Celenza

University of Cassino

Date Written: 2012

Abstract

Intellectual capital (IC) is an important source of value for companies. The competitive firm invests in new productive ideas through scientific and technological researches of the human factor and services. The traditional factors of “old economy” based on physical assets have been replaced or at least reinforced, with the belief that the “new economy” takes its steps mainly through IC. The knowledge workers, at every organizational level, have the knowledge that allows the organization to be competitive and deal with the complexity of the environment by creating intellectual added value. In particular, the proposed analysis consists with an empirical way to show other financial indicators and market-to-book (MTB) value from the perspective of creating value for shareholders based on the dynamics of companies’ performance, as value-added intellectual capital (VAICTM) is capable of expressing a direct relationship with the return on equity (ROE). The traditional financial information cannot ensure the high efficiency of a stock market and the need for IC reporting to explain intangible asset contribution in company performance.

Keywords: intellectual capital (IC), evaluation method, value-added intellectual capital (VAICTM), knowledge-based firms, stock market performance, financial ratios

Suggested Citation

Rossi, Fabrizio and Celenza, Domenico, The Relationship between Intellectual Capital (IC) and Stock Market Performance: Empirical Evidence from Italy (2012). Journal of Modern Accounting and Auditing, November 2012, Vol. 8, No. 11, pp. 1729-1741, Available at SSRN: https://ssrn.com/abstract=2191011

Fabrizio Rossi (Contact Author)

University of Cassino and Southern Lazio ( email )

Via G. Di Biasio, 43
Cassino, Frosinone 03043
Italy

Domenico Celenza

University of Cassino ( email )

Via G. Di Biasio, 43
Cassino, Frosinone 03043
Italy

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