The impact of intellectual capital and investment decisions on the financial performance of banks admitted to the Tehran Stock Exchange

Dissertation for Master Degree

(M.A)

Business Management

Major: Financial Management

Abstract

Today's world is the age of knowledge. Endowments, tangible and natural assets are not the key to the success of societies and organizations, but the possession and management of intangible assets in the turbulent and challenging environment of organizations are the key to their success. Organizations that can identify these intangible assets well and manage them will have better performance than their competitors. In order to manage these assets, it is necessary for organizations to be informed of their current status and to take necessary measures to eliminate their defects and deficiencies. Today, knowledge as the most important capital has replaced material capital, especially in the competitive and technological environment. Therefore, the concept of applied intellectual capital is important and widespread. Intellectual capital manifests in customers, processes, information, brand, human resources and organization systems and plays an increasing role in creating sustainable competitive advantages. This research examines the relationship between intellectual capital, investment decisions and financial performance of banks admitted to the stock exchange. For this purpose, four key indicators of financial performance of banks, investment decisions index and intellectual capital efficiency index were measured using the "Palik" model in the statistical population of banks admitted to the stock exchange during the years 1386 to 1392, then the impact of intellectual capital and its components on each of the financial performance indicators was tested using the structural equation model in EQS software. The results of this research show that intellectual capital has a direct relationship with the indicators of return on equity, the ratio of market value to book value of each share, return on assets and profit per share, and investment decisions in banks admitted to the stock exchange. Keywords: intellectual capital, financial performance, human capital, structural capital, physical capital, investment decisions. The generalities of the research include statement of the problem, importance and necessity, questions and hypotheses, scope of the research and definition of key words. Every research is done with the intention of answering a series of basic questions that arise in the researcher's mind. Therefore, in scientific research, the researcher must state the purpose of the research and in general the problem that the researcher seeks to answer. Stating the problem vaguely and imprecisely, instead of guiding the researcher to appropriate and correct information sources, leads him astray. In addition to the existence of problems and questions in the researcher's mind to justify conducting a specific research, conducting that research must also be important. That is, in fact, doing it according to the use of material and human resources. can be justified and doing it will solve a series of problems or produce new science and information, and the researcher must express the importance of doing his research in clear terms in his research. In explaining the necessity of the researcher's problem, he explains why and the necessary and justified reasons for conducting the research, as well as its scientific, practical or practical goals, and explains the special motivations and necessities for doing it. Then he points to the results of the research and its benefits, and explains how the research helps to expand the scope of science or solve the problems and issues of human life or improve the condition of human life and which people or institutions or organizations can benefit from its results. In this chapter, we discuss the topic, importance and objectives of the research, as well as the tools and methods of information gathering, and the hypotheses and operational definitions of the research variables are also presented.

In today's world, which is a period of unbridled transformations and according to Toffler [1] is a period of power transfer, the management of intellectual capital and intangible assets of organizations is discussed after the issues of re-engineering (1980s) and comprehensive quality management (1990s) as a phenomenon. Importantly, it has affected all aspects of the horizon of management developments. Meanwhile, the newest paradigm that covers the above discussion in the management of organizations is the discussion of intellectual capital management. Stewart believes that intellectual capital is a collection of knowledge, information, intellectual property [2], experience, competition and organizational learning that can be used to create wealth.In fact, the intellectual capital of all employees includes organizational knowledge and its abilities to create added value and causes continuous competitive benefits (Qalich Lee and Mashbaki, 2015). Therefore, intellectual capital seeks to be given more attention in organizations, intellectual assets, knowledge, experience and organizational learning in order to achieve all-round development. Their calculations are impossible. In other words, financial statements have many limitations in describing the real value of companies. In today's knowledge-oriented societies, the efficiency of intellectual capital employed has become much more important than the efficiency of financial capital employed.  This means that in the future, compared to intellectual capital, the role and importance of financial capital in determining sustainable profitability will be significantly reduced. This issue has created a gap between the real value of companies and organizations and what is applied in traditional accounting calculations.

The term intellectual capital was first proposed by John Kent Galbraith [3] (1969). Galbraith believed that intellectual capital is an ideological process and includes the flow of thought. But Stewart[4] (2001) claims that this issue was raised for the first time in 1958, when he collaborated with Itami[5] on the intellectual capital movement. In general, intellectual capital means more than intelligence and is associated with a degree of intellectual operations (Bonits [6], 1998). According to this definition, intellectual capital is not only a fixed intangible asset but also an ideological and dynamic process. In fact, intellectual capital is a combination of knowledge (which often refers to human capital) and skills for applying this knowledge. Edwinson[7]) 2000) introduced intellectual capital as a factor of the company's future profitability, which is derived from the combination of human capital and the ability of the company's employment force. Skaikh [8] (2004) introduced intellectual capital as knowledge that can lead to the creation of value for the company. David Marr [9] (2004) defines intellectual capital as a set of knowledge assets belonging to the organization that increase the value of the organization and improve its situation. The common denominator of all these definitions is the introduction of intellectual capital as knowledge, skills and abilities that can lead to the creation of wealth or valuable outputs for the company. Therefore, intellectual capital is considered as intellectual resources, knowledge, information and intellectual assets that lead to the creation of value and profitability for the company. According to the different definitions of intellectual capital, most models consider three subsets, including human capital, communication capital (customer) and structural capital (organization) for intellectual capital.

Communication capital (customer) is the sum of assets that create a relationship with the environment, customers, shareholders, suppliers, competitors and the government. Although the most important part of communication capital is customer relations, but these relations should not be considered alone. Structural (organizational) capital includes relationships and organizational leaders. is (Edwinson and Malone [10], 1997). From Stewart's point of view, structural capital includes intellectual assets, methodologies, software, processes, etc. (Rahimian et al., 2013).

In all definitions, a correlation between human capital, structural capital and customer capital can be seen. Many researches on intellectual capital have also considered this division. In fact, the correlation between the subsets has caused them to be put under a title called the intellectual capital of the organization (Brooking[11] 1996, Hahn[12], 2001, Rus[13] and others, 1997).

Investment decisions

Investment can be considered one of the basic pillars of the economy of countries. There is no doubt that the increase in production, which is one of the first steps in the development process, will require an increase in investment. For this reason, there are theories in economics that think that some countries lack capital and investment due to lack of development (Nakhjovani, 2012). Investment is an activity in the form of using funds that can create a future profitable flow. According to this definition, each of the commitments of financial assets, sexual assets and production activities means investment. Financial assets, including bank deposits, purchase of national bonds and corporate bonds, purchase of shares, etc. is