Impact of intellectual capital on profitability: Evidence from software development companies in the Slovak Republic
Intellectual capital is the total value of all entity’s intangible resources (organizational, human, and customer). Effective management of intellectual capital in high-tech industries needs determination of its role in ensuring profitability and clarifying the direction of managerial and investment...
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| Format: | Article |
| Language: | English |
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LLC "CPC "Business Perspectives"
2022-06-01
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| Series: | Problems and Perspectives in Management |
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| Online Access: | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/16617/PPM_2022_02_Serpeninova.pdf |
| _version_ | 1811250268009922560 |
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| author | Yuliia Serpeninova Serhii Lehenchuk Martina Mateášová Tetiana Ostapchuk Iryna Polishchuk |
| author_facet | Yuliia Serpeninova Serhii Lehenchuk Martina Mateášová Tetiana Ostapchuk Iryna Polishchuk |
| author_sort | Yuliia Serpeninova |
| collection | DOAJ |
| description | Intellectual capital is the total value of all entity’s intangible resources (organizational, human, and customer). Effective management of intellectual capital in high-tech industries needs determination of its role in ensuring profitability and clarifying the direction of managerial and investment policy in intangible resources. The aim of this study is to investigate the impact of intellectual capital on the profitability of Slovak software development companies. Panel data regression analysis was used as the main research method to analyze the data of 16 Slovak software development companies for 2015–2019. The study designed and analyzed four panel data regression models with different dependent variables (Return on Assets, Net Profit Margin, Gross Profit Margin, Earnings Before Interest and Taxes Margin) and similar independent variables (Capitalized Development Costs, Software, Acquired Intangible Fixed Assets, Personnel Costs, Social Security Costs, Social Costs, and Total Costs of Economic Activity). The analysis of these models was carried out based on the fixed effects method. It was found that intellectual capital reflected in the financial statements of software development companies does not meet the information needs of stakeholders and does not have a significant direct impact on profitability. Only Acquired Intangible Fixed Assets had a direct positive impact on the profitability of software development companies in all four analyzed models, and some independent variables had a negative impact. It is proposed to expand the structure of financial reporting items that characterize the intellectual capital and improve the method of recognizing costs of various types as intangibles. |
| first_indexed | 2024-04-12T16:01:02Z |
| format | Article |
| id | doaj.art-fab69e4813f84bcb84d432cfa7653118 |
| institution | Directory Open Access Journal |
| issn | 1727-7051 1810-5467 |
| language | English |
| last_indexed | 2024-04-12T16:01:02Z |
| publishDate | 2022-06-01 |
| publisher | LLC "CPC "Business Perspectives" |
| record_format | Article |
| series | Problems and Perspectives in Management |
| spelling | doaj.art-fab69e4813f84bcb84d432cfa76531182022-12-22T03:26:12ZengLLC "CPC "Business Perspectives"Problems and Perspectives in Management1727-70511810-54672022-06-0120241142510.21511/ppm.20(2).2022.3416617Impact of intellectual capital on profitability: Evidence from software development companies in the Slovak RepublicYuliia Serpeninova0https://orcid.org/0000-0002-4448-3484Serhii Lehenchuk1https://orcid.org/0000-0002-3975-1210Martina Mateášová2https://orcid.org/0000-0002-9637-9822Tetiana Ostapchuk3https://orcid.org/0000-0001-9623-0481Iryna Polishchuk4https://orcid.org/0000-0002-6074-6627Ph.D., Associate Professor, Accounting and Taxation Department, Sumy State University, Ukraine; Accounting and Auditing Department, University of Economics in Bratislava, Slovak RepublicDoctor of Economics, Professor, Department of Information Systems in Management and Accounting, Zhytomyr Polytechnic State UniversityPh. D., Assistant Professor, Accounting and Auditing Department, University of Economics in BratislavaDoctor of Economics, Professor, Department of Management and Entrepreneurship, Zhytomyr Polytechnic State UniversityPh.D., Associate Professor, Department of Information Systems in Management and Accounting, Zhytomyr Polytechnic State UniversityIntellectual capital is the total value of all entity’s intangible resources (organizational, human, and customer). Effective management of intellectual capital in high-tech industries needs determination of its role in ensuring profitability and clarifying the direction of managerial and investment policy in intangible resources. The aim of this study is to investigate the impact of intellectual capital on the profitability of Slovak software development companies. Panel data regression analysis was used as the main research method to analyze the data of 16 Slovak software development companies for 2015–2019. The study designed and analyzed four panel data regression models with different dependent variables (Return on Assets, Net Profit Margin, Gross Profit Margin, Earnings Before Interest and Taxes Margin) and similar independent variables (Capitalized Development Costs, Software, Acquired Intangible Fixed Assets, Personnel Costs, Social Security Costs, Social Costs, and Total Costs of Economic Activity). The analysis of these models was carried out based on the fixed effects method. It was found that intellectual capital reflected in the financial statements of software development companies does not meet the information needs of stakeholders and does not have a significant direct impact on profitability. Only Acquired Intangible Fixed Assets had a direct positive impact on the profitability of software development companies in all four analyzed models, and some independent variables had a negative impact. It is proposed to expand the structure of financial reporting items that characterize the intellectual capital and improve the method of recognizing costs of various types as intangibles.https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/16617/PPM_2022_02_Serpeninova.pdfintangiblesintellectual capitalprofitabilitysoftware development companies |
| spellingShingle | Yuliia Serpeninova Serhii Lehenchuk Martina Mateášová Tetiana Ostapchuk Iryna Polishchuk Impact of intellectual capital on profitability: Evidence from software development companies in the Slovak Republic Problems and Perspectives in Management intangibles intellectual capital profitability software development companies |
| title | Impact of intellectual capital on profitability: Evidence from software development companies in the Slovak Republic |
| title_full | Impact of intellectual capital on profitability: Evidence from software development companies in the Slovak Republic |
| title_fullStr | Impact of intellectual capital on profitability: Evidence from software development companies in the Slovak Republic |
| title_full_unstemmed | Impact of intellectual capital on profitability: Evidence from software development companies in the Slovak Republic |
| title_short | Impact of intellectual capital on profitability: Evidence from software development companies in the Slovak Republic |
| title_sort | impact of intellectual capital on profitability evidence from software development companies in the slovak republic |
| topic | intangibles intellectual capital profitability software development companies |
| url | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/16617/PPM_2022_02_Serpeninova.pdf |
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