Impact of Knowledge Capital on Performance of Firms: A Case of Firms in Finland
Knowledge capital has become a major factor in a firm’s success. Depending on the owner knowledge capital can be divided into individual and organisational capital. The former is an individual’s knowledge which is comparable to liabilities in the balance sheet. The latter is connected to a firm’s...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Ala-Too International University
2016-11-01
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| Series: | Eurasian Journal of Business and Economics |
| Subjects: | |
| Online Access: | http://www.ejbe.org/EJBE2016Vol09No18p041LEHTIMAKI-LEHTIMAKI.pdf |
| Summary: | Knowledge capital has become a major factor in a firm’s success. Depending on the
owner knowledge capital can be divided into individual and organisational capital.
The former is an individual’s knowledge which is comparable to liabilities in the
balance sheet. The latter is connected to a firm’s structure and resources, and is
comparable to equities in the balance sheet. Measuring knowledge capital is
challenging, as it is often necessary to study private information from within a firm.
This article approaches knowledge capital from a different perspective by studying
public information in order to measure the financial value added by knowledge
capital observed from a firm’s financial statement. This information was used to
explain the financial performance of a firm.
The results of the study indicate a statistically significant effect between the change
in individual capital and economic performance as well as between organisational
capital and economic performance. The immediate effect of individual capital on
economic performance as well as the change in organisational capital was found to
be statistically insignificant. The results imply that a firm looking for short-term
growth should invest in organisational capital whereas a firm looking for long-term
growth should invest in individual capital. |
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| ISSN: | 1694-5948 1694-5972 |