The effect of intellectual capital on financial performance and firm value: BIST-100 example

Science and technology developments have advanced in the twenty-first century, commerce and financial activities between nations have become freely available without restrictions, and access to cross-border products and services has gotten simpler. This process, known as "globalization," has also put corporations under intense competitive pressure in the market. Companies have begun to perceive diverse efforts in terms of innovation and change as a need, not a luxury, in order to achieve a competitive edge and even survive. It is impossible to capture this change and innovation using a company's tangible assets, which are easy to access, replicate, and substitute. The significance of the idea of "intellectual capital" arises at this moment. The data of BIST-100 firms in 2020 between 2009 and 2020 are used in this research to investigate the effect of intellectual capital on company performance. 73 companies were ultimately included in the research. Performance was measured with financial (ROI, return on equity, asset turnover ratio, operating profit margin ratio, and sales growth rate) and firm value (market value/book value ratio, Tobin q ratio, stock return) indicators. These criteria are also dependent variables of the study. The intellectual capital was calculated using the "intellectual value-added coefficient technique" (Value Added Intellectual Coefficient, or VAIC). In accordance with this methodology, intellectual capital; human capital is obtained from the sum of structural capital and capital employed, and each of the relevant variables is included in the study as independent variables. Panel regression analysis was used to test the relationship between the variables, and leverage ratio and firm size were included in the analysis as control variables. According to the findings, each lira created from human capital positively reflects on the return on investment, growth in sales and Tobin q value. The relationship between structural capital and return on assets ratio, operating profit margin ratio and asset turnover ratio is significant and negative. While there is a significant positive relationship between the capital used, among the intellectual capital elements, and the return on assets ratio, market value/book value ratio, asset turnover ratio and stock return; Each lira of added value obtained from the use of capital causes a decrease in the profits of the companies from the equity capital. When the correlation between the control variables and the dependent variables are examined, it is shown that there is a significant and negative relationship between the increase in borrowing levels and the return on assets of the firms, the asset turnover ratio and the operating profit margin ratio. In addition to this negative effect, there is a significant and positive relationship between borrowing ratio, market value/book value and sales growth.