The Driving Force of Market Value and Financial Performance in Knowledge-Based Business Environment: Intellectual Capital

Abstract

This chapter focuses on the importance of intellectual capital (IC) as a driving force of the value creation process for firms and investigates the development of IC literature. Although considerable progress has been made in the last few decades, there are still important shortfalls. There is not a convenient measure to determine the IC efficiency while scholars have a consensus on the definition of IC. This difficulty arises due to the invisibility of IC and the inability to measure it exactly. Many measures have been suggested in time and the following studies have criticized these measures. The most widely used Value Added Intellectual Coefficient (VAIC) measure and its modifications are introduced briefly in this chapter. The importance of IC in a knowledge-based business environment requires more empirical studies and robust measures to explain the differences across industries and countries. Reporting systems should be also improved to achieve the information for more convenient measures. Recent studies emphasize the importance of integrated reporting (IR), which comprises both tangible and intangible assets. © 2021, The Author(s), under exclusive license to Springer Nature Switzerland AG.