Competence value emersion: a key to sound practices in entrepreneurial finance. From 'Q' to 'T' ratios in the North-Eastern Italian experience

Guido Max Mantovani

International Journal of Entrepreneurship and Small Business, 2015, vol. 24, issue 3, 383-416

Abstract: The determinants of the value of the entrepreneurial competences and behaviour are examined. The study reveals that time is the link between marginal productivities of the capital assets and that of the human competences. The successful entrepreneur behaves in order to give marketability to skills, riding a cycle that transforms them into a corporate hallmark. We provide a detailed description of a methodology to measure the 'competence value' and to compare it against standard goodwill estimations. Results of empirical analysis over a sample made of more than 3,000 Italian companies show that the proposed Intato-T-ratio is a stronger estimator than the widely diffused Tobin-Q-ratio. Allocating investments according to the competence value can exploit immediately 51% of hidden values and allow higher growth rates during an entrepreneurial cycle lasting 13 years on average. Aborting competence value in credit allowances procedures will impact dramatically on SMEs after the adoption of Basel-3 agreements.

Keywords: valuation; incomplete markets; small and medium-sized enterprises; SMEs; entrepreneurship; competence value emersion; entrepreneurial finance; Italy; entrepreneurial competences; entrepreneurial behaviour. (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=67460 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijesbu:v:24:y:2015:i:3:p:383-416

Access Statistics for this article

More articles in International Journal of Entrepreneurship and Small Business from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().