The effecet of knowledge and technology on firm valuation

Recently, it is obvious that information is of great importance for almost every aspect of the life due to the rapid change in the technology. In conjunction with the increasing importance of knowledge in our lives, the current era is defined as the knowledge age . Business administration is one of the most affected fields because of the knowledge and knowledge assets with respect to the knowledge age. In the United States and other developed countries, Intangible assets defined also as knowledgebased assets or intellectual capital components with its contemporary meaning, are of great importance for companies to have a competitive advantage. Particularly until the 1990s, the main objective of the firms was the profit maximization; but currently the firms attach more significance to the maximization of shareholder value with the increasing importance of the concept of intellectual capital. This objective, that keeps all the stakeholders in the forefront in terms of the firm, can only be achieved if the firm realizes its own intellectual capital. However, most of the firms today especially in Turkey, still keep on doing their firm valuations based on their tangible assets, and do not consider the intangible assets that increase their firm value more. The main purpose of this study is to point out the significance of the intellectual capital on firm valuation. To this end, the concept of intellectual capital, its components, and its measurement are emphasized in the first chapter. In the second chapter, firm value and its traditional valuation methods are mentioned. In the last chapter containing the implementation, to what extent the technology firms traded on the ISE (Istanbul Stock Exchange) attaches importance to the intellectual capital is examined by using the correlation and multiple regression analysis with the help of the Value Added Intellectual Coefficient of Ante Pulic. As a result of this analysis, it is possible to say that most of the firms, including the knowledge based ones in our country, that did not enter the knowledge age completely, do not attach adequate importance to the intellectual capital.