Intellectual Capital Transformation Evaluating Model

Abstract

Purpose – This paper presents the framework that is developed for analysis of intellectual capital transformation into companies’ value, including an identification of the key factors of this process. Design/methodology/approach – The paper employs intellectual capital on the intersection of the value-based management (VBM) and resource-based view (RBV). Starting from a review of the results provided in the literature regarding intellectual capital evaluation and its link with firm performance, the system of proxy indicators related to IC transformation in both concepts was designed. The evaluation ability of the developed model was justified with the regression analyses. Findings – The detailed algorithm for intellectual capital evaluation in terms of the input-outcomes transformation. The Intellectual Capital Transformation Evaluating Model (ICTEM) provides a holistic view of intellectual resources as companies’ strategic investments. Research limitations/implications – The paper emphasizes that the ICTEM framework could be mostly applied for the analysis of a firm as a typical representative of the industry or the country. In that sense it is not applicable for specific features analysis of a company. Practical implications – The paper highlights the ICTEM as a tool of investments decision making mostly taking into account common trends, the prospects of industries and economies’ development. Originality/value – The ICTEM provides the ostensive framework of intellectual capital transformation analysis using a statistical approach.