Investigation of relationship between intellectual capital(IC) and profitability ratios(PR) in companies admitted to Tehran Stock Exchange

Jadidimohamadabadi, Akbar; Abadi, Ali Jadidi Mohammad; Naji, Mohammad; AliJabbarizahirabadi
August 2013
Advances in Environmental Biology;Aug2013, Vol. 7 Issue 8, p1405
Academic Journal
The lack of reflection of intellectual capital value in financial statements and reports of businesses is one of the most notable drawbacks of traditional accounting systems, whereas in today's knowledge-based industries, the role of intellectual capital in value creation for businesses is more effective compared to that of financial capital. Therefore, the accounting system plays a prominent role in finding appropriate guidelines to attain proper methods for intellectual capital appraisal .This study investigates the relation between intellectual capital and profitability ratios of firms listed on the Tehran Stock Exchange (TSE). The population of the study includes all the firms listed on the TSE, of which a number of 82 firms(410 observations) were selected using systematic elimination method. The research is conducted on the TSE over 2006-2010. In order to measure the intellectual capital, the value added intellectual coefficient (VAIC) was used, which is the most frequently used tool for this purpose. To analyze the data and test the hypotheses, univariate regression method was employed. Based on the results of this research, there is a significant relation between intellectual capital(value added capital physical, value added human capital, and structural capital value added) and profitability ratios (return on assets, return on investments, and return on sale), but there is no significant relation between intellectual capital and the return on equity.


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