A critical validation of the value added intellectual coefficient: use in empirical research and comparison with alternative measures of intellectual capital

Thomas Bassetti, Lorenzo Dal Maso (), Giovanni Liberatore () and Francesco Mazzi
Additional contact information
Lorenzo Dal Maso: ESSEC Business School
Giovanni Liberatore: University of Florence

Journal of Management & Governance, 2020, vol. 24, issue 4, No 10, 1115-1145

Abstract: Abstract The measurement of intellectual capital (IC) constitutes a major challenge in managing intangible resources. Among the various models proposed in prior literature, the value added intellectual coefficient (VAIC) is used by many studies to measure IC. Assuming a perfectly competitive market, this study decomposes the VAIC and demonstrates that it is not directly related to IC. Conversely, the main components of VAIC are the labor share, physical capital share, and interest rate. These results are extended to a non-perfectly competitive setting through a multivariate analysis of a cross-country panel of 50,310 firm-year observations for 2000–2017. The results show that the VAIC still largely depends on exogenous factors being negatively (positively) associated with the labor (physical capital) share. Nevertheless, in this non-perfectly competitive setting, the VAIC also captures a firm’s ability to generate profits, which may be attributable to multiple factors, including IC. To reduce potential measurement biases in empirical research using the VAIC, this study suggests controlling for a firm’s interest rate, labor and capital shares. Adopting this suggestion, this study investigates the association between VAIC and firm performance. The results show that this association is significantly weaker when including the interest rate, labor and capital shares. The theoretical and empirical results suggest future researchers to select the VAIC to measure IC after having conscientiously examined the alternative models proposed in recent literature.

Keywords: VAIC; Intellectual capital; Value added intellectual coefficient; Labor share; Capital share (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://link.springer.com/10.1007/s10997-019-09494-w Abstract (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:kap:jmgtgv:v:24:y:2020:i:4:d:10.1007_s10997-019-09494-w

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/10997/PS2

DOI: 10.1007/s10997-019-09494-w

Access Statistics for this article

Journal of Management & Governance is currently edited by Lino Cinquini

More articles in Journal of Management & Governance from Springer, Accademia Italiana di Economia Aziendale (AIDEA) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().