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The value relevance of intellectual capital on the firm’s market value: an empirical survey on the Italian listed firms

The value relevance of intellectual capital on the firm’s market value: an empirical survey on... The purpose of the paper is to investigate the value relevance of intellectual capital (IC) of Italian listed firms. The paper applies the Ohlson model (1995) to 524 firm-year observations of Italian listed companies for the three-year period 2006–2008 using a panel econometric model. The findings show that the fundamental variables of the Ohlson model (book value and earning) are positively related to the market value. On the contrary, the IC variables, which reflect human capital, innovation capital, process capital and relation capital, do not have a meaningful relation with the market value, except for the last one. Concluding, Italian investors do not seem to be able to detect and incorporate the information on IC as represented in the IC proxies chosen for the research into their business valuation process. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Knowledge-Based Development Inderscience Publishers

The value relevance of intellectual capital on the firm’s market value: an empirical survey on the Italian listed firms

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Publisher
Inderscience Publishers
Copyright
Copyright © Inderscience Enterprises Ltd. All rights reserved
ISSN
2040-4468
eISSN
2040-4476
DOI
10.1504/IJKBD.2011.040626
Publisher site
See Article on Publisher Site

Abstract

The purpose of the paper is to investigate the value relevance of intellectual capital (IC) of Italian listed firms. The paper applies the Ohlson model (1995) to 524 firm-year observations of Italian listed companies for the three-year period 2006–2008 using a panel econometric model. The findings show that the fundamental variables of the Ohlson model (book value and earning) are positively related to the market value. On the contrary, the IC variables, which reflect human capital, innovation capital, process capital and relation capital, do not have a meaningful relation with the market value, except for the last one. Concluding, Italian investors do not seem to be able to detect and incorporate the information on IC as represented in the IC proxies chosen for the research into their business valuation process.

Journal

International Journal of Knowledge-Based DevelopmentInderscience Publishers

Published: Jan 1, 2011

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