Intellectual Capital and Financial Performance considering the crisis period: A European empirical study

Resumo / Abstract: The current study seeks to analyse the impact of the intellectual capital (IC) on the financial performance measured by Return on Assets in the European context for the period 2004-2015 as well as the global financial crisis effect on firms’ financial performance. This study uses data of non-financial listed firms of 8 European countries for the period between 2004 and 2015. In order to differentiate crisis impact on European countries, we divided the eight countries in two groups: (1) group 1 – Greece, Portugal, Spain and Italy; and (2) group 2 – Germany, France, Finland and United Kingdom (UK). The estimation method used in this study is the GMM system (1998) estimator, as a dynamic panel estimator, which allows to do longitudinal studies and to analyse the effect of lagged explanatory variables on firms’ financial performance. Results indicate that IC efficiency of the current period has a positive impact on the financial performance. The three components of Value Added Intellectual Capital (VAICTM) Model - CEE, HCE and SCE of the current period have a positive impact on financial performance, with the exception of SCE of that for the first group of countries has a negative impact on financial performance. Findings suggest that the financial crisis negatively affects financial performance on both groups of countries. The results show that the financial crisis had a negative effect on performance of group 1 and group 2. These results may be a consequence of the reduction of demand as well as of firms’ investments, namely, in intangible assets. Leverage has a negative impact on firms’ financial performance of group 1, while in group 2 it can be noticed that leverage has a positive impact on firms’ financial performance. This suggests that firms of group 1 may had greater difficulties in accessing credit, namely, facing unfavorable terms of credit given that the group 1 is composed by the most affected countries by the global financial crisis, which had negative consequences on the amount as well as on credit terms.

The current study contributes to the current literature, analyzing the impact of IC on firms’ financial performance for two groups of European countries, which had suffered differently the consequences of the 2008 crisis. by exploring the effect of 2008 crisis as well as analyzing the impact of IC on firms’ financial performance for the two groups of European countries.

Keywords: Intellectual Capital; Financial Performance; Value Added Intellectual Coefficient Model.

Outros seminários / Other seminars: Programa completo / Full programme.