Top management characteristics and intellectual capital performance in small Italian companies

• Pages: 1153-1166
• DOI: https://doi.org/10.1108/CG-10-2018-0305
• Date: 09 July 2019
• Published date: 09 July 2019
• Author: Gianluca Ginesti
• Subject Matter: Strategy

Top management characteristics and

intellectual capital performance in small

Italian companies

Gianluca Ginesti

Abstract

Purpose –This study aims to explore the relationship between top management characteristics and

intellectualcapital (IC) performance of smallcompanies.

Design/methodology/approach –This research offersan empirical investigation into a unique sample

of 135 small Italian companies,which have been recognised as meeting legal values.This study uses a

regression analysis to test whether CEO age, CEO connections and management team size affect IC

performance.

Findings –Companies managedby CEOs with higher levels of connections and with a greater number

of managers exhibitimproved IC performance. In addition, this study providesevidence that companies

with olderCEOs demonstrate better IC efficiency.

Research limitations/implications –This study doesnot consider all top management-specificfactors

and incentivesthat may affect IC performance anduses a limited sample of companies.

Practical implications –This study suggests that increased network activity and larger management

teams are beneficialfor small companies to improve the efficiencyof IC used.

Originality/value –The work offers novel empirical evidence to understand what governance and

management-specificfactors affect the efficiencyin managing IC assets in small companies.

Keywords Corporate performance, Accounting-based measures,CEO characteristics,

Intellectual capital, Top management

Paper type Research paper

1. Introduction

Researchers and professional bodies have shown growing interest in the performance of

intellectual capital (IC) as companies’ value creation currently relieson intangible resources

(Kujansivu and Lo

¨nnqvist, 2007;Choong, 2008;Nadeem et al., 2018). Indeed, there is a

common view that the group of intangible assets that constitutes a company’s IC

significantly increases the organisation’s competitive advantage (Chen et al., 2005;Pew

Tan et al., 2007). A number of studies have shown that IC is a key driver of companies’

performance and reputation (Clarke et al.,2011;Ginesti et al., 2018) and is frequently used

by scholars to explain the gap between the market and book values of companies (Lev and

Zarowin, 1999). Moreover, literature has emphasised that some of IC dimensions are

important to identify the ability of firm’s innovation (Choong, 2008;Inkinen, 2015). As a

consequence, in the current knowledge economy the stream of research on IC is evolving

as a discipline that has achieved crucial relevance in both academic and professional

community (Serenko and Bontis, 2013;Dz

ˇenopoljac et al.,2017;Roos, 2017).

All these arguments suggest that works aimed at investigating IC performance and its

relationship with companies’ characteristics is worthy of study. While most studies have

Gianluca Ginesti is based

at the Department of

Economics, Management,

Institutions (DEMI),

University of Naples

Federico II, Italy.

Received 2 October 2018

Revised 24 March 2019

Accepted 13 May 2019

The author would like to thank

Professor Gabriel Eweje, Editor

in Chief, Dr. Maggie Foley,

Associate Editor, and the three

anonymous referees for their

valuable comments.

DOI 10.1108/CG-10-2018-0305 VOL. 19 NO. 6 2019, pp. 1153-1166, ©Emerald Publishing Limited, ISSN 1472-0701 jCORPORATE GOVERNANCE jPAGE 1153