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The impact of customer capital on company's market value: An empirical study from 100 U.S. stock market leaders Cover

The impact of customer capital on company's market value: An empirical study from 100 U.S. stock market leaders

International Journal of Management and Economics
Volume 57 (2021): Issue 4 (December 2021)
By:  and    
Open Access
|Dec 2021
Figures & tables

Figures & Tables

Table 1

Examples of articles on the impact of customer capital on company's MV

Year of publicationAuthor/AuthorsFindings/results
Regarding all intangible assetsRegarding customer (relational, relationship) capital
2005M.C. Chen, S.J. Cheng, and Y. HwangThe firms’ intellectual capital has a positive impact on MV and financial performance, and may be an indicator for future financial performanceThe object–advertising expenditure.
The authors suggested that companies with greater advertising expenditure tend to have higher market-to-book value ratios, but according to the results of correlation analysis it was found that the coefficient on advertising expenditure is not significant
2005C.-Y. Tseng and Y.-J.J. GooThe results generally support the hypothesis regarding the relationship between intellectual capital and corporate valueThe object–relationship capital.
The findings of this study suggest that relationship capital directly influence corporate value
2013M.B. Taghieh, S. Taghieh, and Z. PoorzamaniIt can be concluded that customer capital, which is considered as bridge or catalyst in intellectual capital activities, is the dominant and determining factor to change intellectual capital to the MV, accordingly, the company's business performanceThe object–relational capital.
Based on the results of testing hypotheses, relational capital has significant and positive effect on firm value
2015B. BchiniBased on the survey data in Tunisia, the authors find that the link between intellectual capital and value creation is linear and positive in manufacturing companiesThe object–relational capital.
The results of these regressions are presented that the relationship between relational capital and value creation in the Tunisian manufacturing companies is statistically significant
2017F. Sardo and Z. SerrasqueiroConcerning firms’ MV, the current study shows that human capital and structural capital have higher contribution to firm's MV. Therefore, human capital can be seen as the main driver of firms’ future growth and innovativenessThe object–relational (or customer) capital.
As a result of the regression analysis, it was found that the hypothesis that relational capital has a positive effect on firms’ MV was rejected
2018I. Yilmaz and G. AcarAmongst the components of multiple factors model, the most influential explanatory variable was capital employed, then comes human capital, and relational capital. Structural capital has the lowest effect on explaining both company's value and performanceThe object–relational capital.
The relational capital has positive and significant effect on M/B ratio

[i] M/B, market to book; MV, market value.

Table 2

The variants of regression models of the impact of customer capital on company's MV

Model 1Model 2Model 3
Dependent variable
MV
Independent variableIndependent variablesIndependent variables
IAcustIntangible assets that characterize customer capitalIAcustIntangible assets that characterize customer capitalIAcustIntangible assets that characterize customer capital
IAotherOther intangible assetsIAotherOther intangible assets
GWGoodwillGWGoodwill
RDResearch and development costsRDResearch and development costs
TATotal assets
IntResearch and development intensity
FinLevFinancial leverage

[i] MV, market value.

Table 3

Summary statistics, using the observations 1–100 (Model 2)

VariableMeanMedianStandard deviationMinMax
MV1,40,10792,9981.65e + 0.0526,2629,56,625
IAcust3,4814327,537045,358
IAother8,4611,36720,39501,38,005
GW17,0928,80121,74501,46,370
RD2,4809153,858021,419

[i] GW, goodwill; IAcust, intangible assets that characterize customer capital; MV, market value; RD, research and development.

Table 4

Correlation coefficients for independent variables of Model 2 using the observations 1–100

IAcustIAotherGWRDVariables
1.00000.32390.64930.0127IAcust
1.00000.6346−0.0696IAother
1.00000.0985GW
1.0000RD

[i] GW, goodwill; IAcust, intangible assets that characterize customer capital; RD, research and development.

Figure 1

Correlation matrix of Model 2. GW, goodwill; IAcust, intangible assets that characterize customer capital.

Table 5

Coefficients of determination

R2IAcust0.44
IAother0.44
GW0.64
RD0.05

[i] GW, goodwill; IAcust, intangible assets that characterize customer capital; RD, research and development.

Table 6

Summary statistics, using the observations 1–100 (Model 3)

VariableMeanMedianStandard deviationMinMax
MV1,40,10792,9981.65e+0.0526,2629,56,625
IAcust3,4814327,537045,358
IAother8,4611,36720,39501,38,005
GW17,0928,80121,74501,46,370
RD2,4809153,858021,419
TA (log)10.9510.930.968.5513.18
Int1.922.000.881.003.00
FinLev14.531.6985.12−8.03805.6

[i] FinLev, financial leverage; GW, goodwill; IAcust, intangible assets that characterize customer capital; MV, market value; RD, research and development; TA, total assets.

Table 7

Correlation coefficients for independent variables of Model 3, using the observations 1–100

IAcustIAotherGWRDTAIntFinLevVariables
1.00000.32390.64930.01270.3903−0.0998−0.0621IAcust
1.00000.6346−0.06960.4128−0.0884−0.0571IAother
1.00000.09850.58500.0021−0.0962GW
1.00000.32900.46610.0176RD
1.0000−0.0794−0.1267TA
1.0000−0.0585Int
1.0000FinLev

[i] FinLev, financial leverage; GW, goodwill; IAcust, intangible assets that characterize customer capital; Int, intensity of research and development; RD, research and development; TA, total assets.

Figure 2

Correlation matrix of Model 3. FinLev, financial leverage; GW, goodwill; IAcust, intangible assets that characterize customer capital; Int, intensity of research & development.

Table 8

Coefficients of determination

R2IAcust0.45
IAother0.45
GW0.68
RD0.40
TA0.49
Int0.31
FinLev0.03

[i] FinLev, financial leverage; GW, goodwill; IAcust, intangible assets that characterize customer capital; Int, intensity of research and development; RD, research and development; TA, total assets.

100 U.S. stock market leaders (the list was relevant as of January 10, 2020)

NoCompanyNoCompany
13M Co.51Illinois Tool Works Inc.
2Abbott Laboratories52Intel Corp.
3AbbVie Inc.53International Business Machines Corp.
4Accenture PLC54Intuit Inc.
5Adobe Inc.55Intuitive Surgical Inc.
6Allergan PLC56Johnson & Johnson
7Alphabet Inc.57Kimberly-Clark Corp.
8Altria Group Inc.58Kinder Morgan Inc.
9Amazon.com Inc.59Kraft Heinz Co.
10Amgen Inc.60Linde plc
11Apple Inc.61Lockheed Martin Corp.
12Applied Materials Inc.62Lowe's Cos. Inc.
13AT&T Inc.63Marriott International Inc.
14Automatic Data Processing Inc.64McDonald's Corp.
15Becton, Dickinson & Co.65Medtronic PLC
16Biogen Inc.66Merck & Co. Inc.
17Boeing Co.67Microsoft Corp.
18Booking Holdings Inc.68Mondelēz International Inc.
19Boston Scientific Corp.69Netflix Inc.
20Bristol-Myers Squibb Co.70Nike Inc.
21Broadcom Inc.71Northrop Grumman Corp.
22Caterpillar Inc.72NVIDIA Corp.
23Charter Communications Inc.73Occidental Petroleum Corp.
24Chevron Corp.74Oracle Corp.
25Cisco Systems Inc.75PepsiCo Inc.
26Coca-Cola Co.76Pfizer Inc.
27Colgate-Palmolive Co.77Philip Morris International Inc.
28Comcast Corp.78Phillips 66
29ConocoPhillips79Procter & Gamble Co.
30Costco Wholesale Corp.80Qualcomm Inc.
31CSX Corp.81Raytheon Co.
32CVS Health Corp.82Regeneron Pharmaceuticals Inc.
33Danaher Corp.83salesforce.com Inc.
34Delta Air Lines Inc.84Schlumberger Ltd.
35DuPont de Nemours Inc.85Starbucks Corp.
36Eli Lilly & Co.86Stryker Corp.
37Emerson Electric Co.87Target Corp.
38EOG Resources Inc.88Texas Instruments Inc.
39Estée Lauder Cos. Inc.89Thermo Fisher Scientific Inc.
40Exxon Mobil Corp.90TJX Cos. Inc.
41Facebook Inc.91T-Mobile US Inc.
42FedEx Corp.92Union Pacific Corp.
43Ford Motor Co.93United Parcel Service Inc.
44General Dynamics Corp.94United Technologies Corp.
45General Electric Co.95UnitedHealth Group Inc.
46General Mills Inc.96Verizon Communications Inc.
47General Motors Co.97Walgreens Boots Alliance Inc.
48Gilead Sciences Inc.98Walmart Inc.
49Home Depot Inc.99Walt Disney Co.
50Honeywell International Inc.100Zoetis Inc.
DOI: https://doi.org/10.2478/ijme-2021-0025 | Journal eISSN: 2543-5361 (formerly 2299-9701) | Journal ISSN: 2299-9701
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Language: English
Page range: 299 - 312
Submitted on: May 7, 2020
Accepted on: Dec 2, 2021
Published on: Dec 31, 2021
Published by: SGH Warsaw School of Economics
In partnership with: Paradigm Publishing Services
Publication frequency: 4 issues per year
Keywords:
customer capital,
goodwill,
intangible assets,
market value,
research and development costs
JEL:
D24,
E22,
G32,
L14
Related subjects:
Business and economics,
Business management,
Management accounting, financial controlling, cost calculation, investment

© 2021 Serhii Lehenchuk, Tetiana Zavalii, published by SGH Warsaw School of Economics
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Volume 57 (2021): Issue 4 (December 2021)
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