Intangible capital and performance: Overview over previous models

Abstract

Intangible capital represents all of the company's intangible assets: these are separately identifiable assets that contribute to the company's current and future profitability, but whose value does not appear on the balance sheet.

Understanding intangible capital has become, today, a challenge for managers, financiers and accountants, because, in a context of increased competition, the role of this capital in the creation of value for all stakeholders is a recent concern. Similarly, the omnipresence of intangibles has accelerated reflection on the sources of business performance.

The overall value of a company is based on a mix of different types of intangible resources, but also on its dynamic ability to combine, renew, develop, etc. Thus, it is not necessarily the company richest in physical resources that is competitive because intangible capital has become the economic concept associated with the essential of the value of the company.

However, research from emerging nations reveals that there is a dearth of empirical study in Africa.

Despite considerable contributions from experts overseas, the notion of intangible capital is still in its infancy in this emerging country. As a result, there is a strong need to investigate the idea of intangible capital and evaluate if existing metrics can be applied to all emerging nations.

All these elements lead us to ask the following question. How intangible capital, through its human components, organizational and relational, contributes to the performance of companies?  To answer this question, we will attempt to analyze the mechanisms of interaction between the various components of the intangible capital of companies by presenting a narrative literature review that aims to investigate the relationship between intangible capital and business performance.

Keywords: Intangible capital; Performance; Human capital; Organizational capital; relational capital.

JEL Classification: M50

Paper type: Theoretical Research