The Relationship between Changes in Corporate Governance Characteristics and Intellectual Capital

Farzaneh Nassirzadeh (), Davood Askarany and Solmaz Arefi-Asl
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Farzaneh Nassirzadeh: Faculty of Administrative and Economic Sciences, Ferdowsi University of Mashhad, Mashhad 9177948974, Iran
Davood Askarany: Department of Accounting and Finance, Business School, The University of Auckland, Auckland 1010, New Zealand
Solmaz Arefi-Asl: Faculty of Administrative and Economic Sciences, Ferdowsi University of Mashhad, Mashhad 9177948974, Iran

JRFM, 2023, vol. 16, issue 2, 1-19

Abstract: The primary goal of this study was to investigate the effects of changes in corporate governance elements on a company’s valuable resources (such as intellectual capital and its components). Previous studies have examined the impacts of some corporate governance characteristics on intellectual capital performance as a whole and they have produced inconclusive and different results. This paper examines the effects of some corporate governance characteristics (i.e., the change in CEO, the evolution of auditor, the change in board independence, and the change in institutional ownership) on intellectual capital and its components (i.e., capital employed, human capital, and structural capital). This research is based on a quantitative study and the selected sample contains 1170 observations from 220 companies listed on the Middle East Stock Exchange from 2011 to 2018. The research findings show a positive and significant relationship between an increase in institutional ownership and intellectual capital and its two components (human capital and structural capital). The results support the relationship between a change in auditor and intellectual capital and human capital efficiency. Further, a positive and significant association was found between an increase in board independence and human capital. However, no relationship was found between a change of CEO and intellectual capital or any of its components. This study extends the research field of corporate governance by studying the effects of changes in corporate governance characteristics on intellectual capital for the first time. Given the significant role of intellectual capital in the performance of firms, this study provides essential information to organisations’ decision makers.

Keywords: changes of CEO; changes of auditor; institutional investors; board independence; intellectual capital (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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