The relationship between intellectual capital, adjusted economic value added and stock liquidity

Document Type : Research Paper


1 Associate Professor, Faculty of Management, University of Tehran, Tehran, Iran

2 PhD Student, Faculty of Management, University of Tehran, Tehran, Iran


Despite numerous studies on intellectual capital, the indirect effect through economic value adjustment on stock liquidity has not been considered. This research is trying to fill this gap. The aim of this study was to determine the relationship between intellectual capital indirectly through mediator (EVA modified) liquidity of the stock. The statistical population included the companies listed on Tehran Stock Exchange over the period of 2003 to 2013. The results show that intellectual capital  significantly affects adjusted economic value added. The indirect effect of structural funds and communication through Adjusted Economic Value Added on the liquidity of the stock is positive and significant. But human capital is not transferred to liquidity through justified economic value-added justified but it directly affects stock liquidity.


Abbaci, A. & Goldie Sedghi, A. (2010). The effect of intellectual capital on the financial performance of companies in the Tehran Stock Exchange. Accounting Management, 17 (60): 57-74. (in Persian)
Abdullaha, D. & Sofiana, S. (2012). The Relationship between Intellectual Capital and Corporate Performance. Procedia – Social and Behavioral Sciences, (40): 537–541.
Ahmdpour, A. & Bagheban, M. (2014). The relationship between the liquidity of assets and critiquing the liquidity of shares in the Tehran Stock Exchange. Empirical Research in Accounting, 4 (14): 61-77. (in Persian)
Altendorfer, K. & Jodlbauer, H. (2011). Which utilization and service level lead to the maximum EVA? International Journal of Production Economics, 130(1): 16-26.
Amihud, Y. & Mendelson, H. (1991). Liquidity, asset prices and financial Policy. Financial Analysis Journal, 47(6): 56-66.
Amihud, Y. (2002). Illiquidity and stock returns: Cross section and timeseries effects. Journal of Financial Markets, 5(1): 31-56.
Anvari Rostami, A.S. & Rostami, M. (2003). Assessment models and assessment methods value of intellectual capital investment companies. The Iranian Accounting and Auditing Review, 10 (34): 51-57. (in Persian)
Bacidore, J.M., Boquist, J.A., Milbourn, T.T. & Thakor, A.V. (1997). The Search for the Best Financial Performance measure. Financial Analysis Journal, 53 (3): 11-20.
Bontis, N. (1998). Intellectual capital: an exploratory study that develops measures and models. Management Decision, 36(2): 63-76.
Bontis, N., Keow, W.C.C. & Richardson, S. (2000). Intellectual capital and Business performance in Malaysian Industries. Journal of Intellectual capital, (1)1: 85-100.
Bortolotti, B., De Jong, F., Nicodano, G. & Ibolya, S. (2006). Privatization and Stock Market Liquidity. Journal of Banking and Finance, 31(2): 297-316.
Bounfour, A. (2003). The IC-DVAL Approach. Journal of Intellectual capital, 4(3): 396-412.
Chai, D., Faff, R. & Gharghori, P. (2010). New evidence on the relation between stock liquidity and measures of trading activity. International Review of Financial Analysis, 19(3): 181-192.
Chang, W. & Hsieh, J. (2011). The dynamics of intellectual capital in Organizational development. African Journal of Business Management, 5(6): 2345-2355.
Chen, J., Zhu, Z. & Xie, H.Y. (2004). Measuring intellectual capital: a new model and empirical study. Journal of Intellectual Capital, 5(1): 195-212.
Fang, V.W., Noe, T.H. & Tice, S. (2009). Stock market liquidity and firm value. Journal of Financial Economics, 94(1): 150-169.
Farsio, F., Degel, J. & Degner, J. (2000). Economic Value-added (EVA) and Stock Return .The Financier, 7(1-4): 115-118.
Giju, G.C., Badea, L., Lopez Ruiz, V.R. & Pena Nevado, D. (2010). Knowledge Management-the Key Resource in the Knowledge Economy. Theoretical and Applied Economics, 17(6): 27-36.
Harris, R., McAdam, R., McCausland, I. & Reid, R. (2013). Knowledge management as a source of innovation and competitive advantage for SMEs in peripheral regions. The International Journal of Entrepreneurship and Innovation, 14(1): 49-61.
Holland, J. (2006). Fund management, intellectual capital, intangibles and private disclosure. Managerial Finance, 32 (4): 277-316.
Kaplan, R.S. & Norton, D.P. (1996). Using the balanced scorecard as strategic management system. Harvard Business Review, 74(1): 75-85.
Karami, Gh., Nazari, M. & Shafipour, S.M. (2010). Economic Value Added and liquidity of the stock market. Financial Research, 12 (30): 117-132.
(in Persian)
Li, J., Mangena, M. & Pike, R. (2012). The effect of audit committee characteristics on intellectual capital disclosure. The British Accounting Review, 44 (2): 98–110.
Lin, C. & Zhilin, Q. (2008). What Influence the Company’s Economic Value Added? Journal of Management Science and Engineering, 2(1): 66-76.
Lohman, C., Fortuin, L. & Wouters, M. (2004). Designing a Performance Measurement System: A case study. European Journal of Operational Research, 156(2): 267-286.
Madhoushi, M. & Asgharnejad Amiri, M. (2009). Measuring intellectual capital and evaluate its relationship with financial returns. The Iranian Accounting and Auditing Review, 16 (57): 101-116. (in Persian)
Mahdavi, Gh. & Hosseini Akhary, M. (2008). What are the best criteria for evaluating financial performance? Economic Bulletin, 88 (4): 121-46.
(in Persian)
Mashayekhi, B. & Talebi, A. (2009). Does Economic Value Added is a good alternative for profit? Financial Accounting and Auditing Research, 1(2): 35-60. (in Persian)
Massa, S. & Testa, S. (2009). A knowledge management approach to organizational competitive advantage: Evidence from the food sector. European Management Journal, 27(2): 129-141.
Namazi, M. & Ghadirian Rany, M. H. (2014). Examines the relationship between intellectual capital and its components at risk of bankruptcy companies listed in Tehran Stock Exchange. Empirical Research in Accounting, 3 (3): 115-141. (in Persian)
Nazemi, F. & Matlabi, A. (2011).The structural model of intellectual capital on organizational learning in Beheshti University. New Approach in Educational Administration, 2(5): 29-50. (in Persian)
Noravesh, A. & Mashayekhi, B. (2004). Useful added value in predicting the earnings of companies. Studies - Products listed in the Tehran Stock Exchange during the year 81-1375. The Iranian Accounting and Auditing Review, 11 (36): 95-108. (in Persian)
Ooi, J.T.L. & Liow, K.H. (2002). Real State Corporations: the Quest for Value. Journal of Property Investment & Finance, 20(1): 23-35.
Pourzamani, Z., Jahanshad, A. & Mahmoodabadi, A.S. (2012). the effect of intellectual capital on market value and financial performance. The Iranian Accounting and Auditing Review, 19 (68): 17-30. (in Persian)
Rahmani, A., Hosseini, S. & Rezapour, N. (2010). Relationship between institutional ownership and liquidity in Iran. The Iranian Accounting and Auditing Review, 17 (61): 39-54. (in Persian)
Rezaei, F., Hemati, H. & Zamani, R. (2009). Assess the impact of intellectual capital in the creation of economic value added and market. Journal of Economics and Business, 1 (1): 59–71. (in Persian)
Riahi Belkaoui, A. (2003). Intellectual capital and firm performance of US multinational firms: a study of the resource based and stakeholder views. Journal of Intellectual Capital, 4(2): 215-226.
Saeedi, A. & Dadar, A.M. (2010). The relationship between stock liquidity with a liquidity index at Tehran Stock Exchange earlier period. Industrial Management Studies, 6 (16): 75-97. (in Persian)
Scott, W.R. (2012). Financial Accounting Theory. Sixth Edition, Person: Canada.
Shams, SH. & Khalili, M. (2011). The relationship between intellectual capital and financial performance of companies listed on the stock exchange. Financial management and accounting, 1 (1): 51 -65. (in Persian)
Taliyang, S.M., Abdul Latif, R. & Mustafa, N.H. (2011). The Determinates of Intellectual Capital Disclosure among Malaysian Listed Companies. International Journal of Management and Marketing Research, 4(3):25-33.
Tan, H.P. Plowman, D. & Hancock, P. (2007). Intellectual capital and financial returners of companies. Journal of Intellectual Capital, 8(1): 76-95.
Wang, J. (2008). Investigating market value and intellectual capital for S&P 500. Journal of Intellectual Capital, 9(4): 546 -563.
Wang, W.Y. & Chang, C. (2005). Intellectual capital and Performance in Causal Models: Evidence from the information Technology Industry in Taiwan. Journal of Intellectual capital, 6(2): 222-236.
Weimin, L. (2006). A liquidity-augmented capital asset pricing model. Journal of financial Economics, 82(3): 631–671.
Yahyazadehfar, M. Shams, SH. & Larimi, S.J. (2010). Examine the relationship between liquidity and stock returns in the Tehran Stock Exchange. Financial Research, 12 (29): 111-128. (in Persian)
Zéghal, D. & Maaloul, A. (2010). Analysing value added as an indicator of intellectual capital and its consequences on company performance. Journal of Intellectual Capital, 11 (1): 39-60.