Narrow Results

In this study we used Japanese firm-level data in order to explore the productive impact of organizational capital by isolating the effect of other intangibles like R&D, brand, human and social capital. Fixed-effect and random-effect panel methodology are proposed to assess specific-organizational capital at firm level. Our results suggest that in monetary terms the value of firm-specific organizational capital stock is significant when compared to traditional assets. Findings suggest that firms building up higher stocks of organizational capital not only increase their productivity but also their value.

In this study we examined Japanese firm-level data to test whether increments in intangible assets will leads to differences in productivity growth. Our results show that the marginal contribution of inputs varies a greatly among sectors, industries and depending on firm's size. Therefore, marginal increments in intangibles investments are not always associated with productivity growth suggesting that when intangibles exceed a threshold, additional investments could be inefficient. We conclude that among intangibles, firm-specific organizational capital and advertising are two of the critical factors in determining the productivity growth.

Tangibles have measurements generally on ratio scales with arbitrary units that are always interpreted by using judgments as to what particular purpose the measurements serve. How two measurements on a ratio scale are related with respect to dominance leads to forming their ratio which is a dimensionless number. The judgment of an expert can be used to estimate this ratio when the objects are homogeneous. The process of using judgments to make comparisons is then extended by clustering and using pivots to measure inhomogeneous objects or criteria. The paper shows the generality of the analytic network process (AHP) as a method of measurement comparing it with direct measurement and with the utility approach through an example. It is also shown with an application from economics that the judgment process can be sufficiently accurate to produce numerical outcomes that are close to what one obtains by conventional methods, thus serving to validate its use in the measurement of intangibles when informed people are involved.

Over the past decades, the diffusion of new technological innovations has transformed the economies. In particular, the strategic emphasis shifted from efficient management of tangibles assets to innovation and effective usage of intangible assets. In this study we explore how the various combinations of sort of intangibles assets, like firm-specific organizational capital (FSOC), technology, brand, human and social capital affect the firm's corporate performance. The results suggest that regardless of the firms' type, those with higher stocks of FSOC, human and social capital outperform firms with higher stocks in only one dimension, suggesting a high degree of complementarity between them. The results also indicate that intangibles like FSOC and human and social capital are more likely to impact on productivity, whereas R&D and advertising are more likely to impact on the firm's value.

The difference between knowledge capital and innovation and their combined impact on firm market performance remains a puzzle. Firms can utilise their accumulated stock of knowledge to create value, and at the same time, allocate their resources each year to create innovation, hoping to sustain their performance and make a better future. Using time fixed effects panel regression with industry and country dummies, this study investigates how knowledge capital and innovation impact firm performance by analysing the sample of 2,958 listed companies of Asian countries during 2015–2019. We observe that different sectors exhibit strong variations in their levels of knowledge capital and innovation. This study finds that more knowledge capital negatively impacts firm performance, but up to a certain point. The U-shaped relationship found suggests that learning and accumulating capabilities to exploit knowledge capitals’ potential is essential to achieve higher firm value. We also find that firms’ more spending on innovation positively impacts firm performance, but only up to a certain level. An inverted U-shaped relationship found suggests a balanced investment in innovation activities to attain improved firm performance. Implications for management and potential for further research are provided.