Assessment of the intellectual capital impact on the growth of business value

Abstract

Successful economic development has increasingly begun to depend on what investment will be made in people and the preservation and development of intellectual potential. In order to successfully grow, Lithuanian small and medium-sized enterprises is limited by the small market and the high competition prevailing in it. Therefore, to grow successfully, companies must look for ways to expand their operations in international markets. The valuation of a company’s intellectual capital is complicated by the fact that this object is an immaterial, intangible, and complex application of valuation models. Therefore, there is a particular lack of simple, easy-to-implement models of intellectual capital that relate to the available intellectual capital and its use. We can conclude that due to these reasons, Lithuanian companies do not use intellectual capital efficiently enough, therefore they tend to focus more on local markets and meeting its needs. Therefore, there is a need for empirical research and suggestions for evaluation methods and their practical application in organizations. The aim of this article is to determine the intellectual capital in the organization and its impact on the increase of business value by analysing and summarizing the concepts of intellectual capital presented in the scientific literature. The research methodology will consist of two parts: in the first part, based on the VAIC intellectual capital evaluation model, the intellectual capital in companies, efficiency indicators and its components are evaluated. In the next part, based on the correlation-regression analysis, the paper will determine the impact of intellectual capital on the increase of business value of companies through the rate of return on equity. This research methodology will aim to find out whether intellectual capital affects companies’ financial performance and business value.