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Strategy, intellectual capital and operating performance

Strategy, intellectual capital and operating performance This study explores the relationship between intellectual capital (IC) and future operating performance under the prism of different strategic orientations (i.e., prospectors versus defender) and explanations (i.e., investing versus signalling). Our data sample consists of 11,085 firm-year observations of US listed firms for the period 2000-2019. We employed organisational capital and R&D capital as measures of a firm's IC intensity. It seems that strategy affects the likelihood of a firm to be classified as a low or high IC intensive. Organisational capital improves future operating performance across firms with the same or with different strategic orientations. R&D capital affects primarily prospectors' future operating performance. Depending on the measure of IC intensity or operating performance, the positive relationship between IC and future operating performance can be explained because either the IC expenditures operate as investments that improve future performance or expectations for improved future operating performance trigger increased IC expenditures. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Managerial and Financial Accounting Inderscience Publishers

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Publisher
Inderscience Publishers
Copyright
Copyright © Inderscience Enterprises Ltd
ISSN
1753-6715
eISSN
1753-6723
DOI
10.1504/ijmfa.2023.127526
Publisher site
See Article on Publisher Site

Abstract

This study explores the relationship between intellectual capital (IC) and future operating performance under the prism of different strategic orientations (i.e., prospectors versus defender) and explanations (i.e., investing versus signalling). Our data sample consists of 11,085 firm-year observations of US listed firms for the period 2000-2019. We employed organisational capital and R&D capital as measures of a firm's IC intensity. It seems that strategy affects the likelihood of a firm to be classified as a low or high IC intensive. Organisational capital improves future operating performance across firms with the same or with different strategic orientations. R&D capital affects primarily prospectors' future operating performance. Depending on the measure of IC intensity or operating performance, the positive relationship between IC and future operating performance can be explained because either the IC expenditures operate as investments that improve future performance or expectations for improved future operating performance trigger increased IC expenditures.

Journal

International Journal of Managerial and Financial AccountingInderscience Publishers

Published: Jan 1, 2023

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