MtB versus VAIC in measuring intellectual capital: Empirical evidence from Italian listed companies

William Forte, Gaetano Matonti, Giuseppe Nicolò, Jon Tucker

Research output: Contribution to journalArticlepeer-review

55 Downloads (Pure)


The purpose of this paper is to compare two of the most commonly utilized methods employed to measure the Intellectual Capital (IC) value: Market to Book (MtB) ratio and the Value Added Intellectual Coefficient (VAIC), in order to determine the most suitable in the context of Italian listed firms and their respective relationships with some key IC determinants. The study is conducted for a sample of Italian listed firms over the period 2009-2014. Different tests are employed to compare VAIC and MtB, while two linear panel regression models with fixed effects models are performed in order to test the relationship between IC value and selected determinants. The results suggest that the MtB ratio is a better estimator of IC value than VAIC. MtB, IA and profitability – are significant positive drivers, while leverage and size are significant negative drivers. For VAIC, only profitability and leverage are significant determinants, both having a positive effect. Recognised limitations in measuring IC value through MtB are partially mitigated because the sample is composed of listed companies preparing financial statements according to IFRS since 2005. Managers should try to avoid rigidity in their organisational structure and to focus on an IC investment strategy. The results could be beneficial for financial analysts and investors in selecting the best method for IC measurement. The paper makes an innovative comparison between two alternative IC metrics, to determine which is more effective in capturing IC value in an Italian listed firms’ context. Further, it identifies some key determinants of IC value.
Original languageEnglish
Article numberA91B13362271
Pages (from-to)588-601
Number of pages14
JournalAfrican Journal of Business Management
Issue number17
Publication statusPublished - 30 Nov 2019

Bibliographical note

Copyright © 2020 Author(s) retain the copyright of this article.
This article is published under the terms of the Creative Commons Attribution License 4.0.


  • Intellectual capital
  • intangible assets
  • market-to-book ratio
  • value added intellectual coefficient (VAIC)
  • Italian listed firms


Dive into the research topics of 'MtB versus VAIC in measuring intellectual capital: Empirical evidence from Italian listed companies'. Together they form a unique fingerprint.

Cite this