The Impact of Intellectual Capital Efficiency on the Profitability of Agricultural Enterprises

Magdalena Kozera ()
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Magdalena Kozera: Poznan University of Life Sciences

A chapter in The Essence and Measurement of Organizational Efficiency, 2016, pp 123-136 from Springer

Abstract: Abstract The aim of this article is to examine whether the efficiency of generation of added value from intangible resources in agricultural enterprises is related to their financial performance. According to conventional wisdom, the economic efficiency of agricultural enterprises is a function of the use of owned balance sheet and non-balance sheet resources, which are referred to as intellectual capital. One of the measures describing the effects of the use of these resources is the Value-Added Intellectual Coefficient (VAIC™) developed by Pulić. Similarly to profitability indicators used in financial analysis, it is based on companies’ source data (balance sheet and income statement). This enables the study of the relationship between VAIC and its derivatives and corporate profitability measured with the indicators of the Return On Assets (ROA) and Return On Equity (ROE). The paper makes reference to a wide range of publications on the efficiency of use of intellectual capital and its impact on the financial results in non-agricultural sectors and it presents the results of a study on a group of Polish agricultural enterprises. The results confirmed a correlation between the VAIC™ and profitability indicators, pointing to the growing importance of intellectual capital in agricultural enterprises, which justifies further research. The research shows that intellectual capital is important to generate value added and results in enterprises. So far researchers of the agricultural sector have been disregarding this issue. The study proves the thesis that financial results are strongly related to the efficient use of non-balance sheet resources of intellectual capital.

Keywords: Intangible resources; Intellectual capital; VAIC™; Agricultural enterprise; Efficiency; Profitability (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-319-21139-8_8

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DOI: 10.1007/978-3-319-21139-8_8

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