Volume 18, Issue 4 (12-2021)
jor 2021, 18(4): 85-102 |
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Zareian M, Banimahd B, Nazari R, Moradzadeh Fard M. Assessing Companies Efficiency Based on Intellectual Capital and Its Effect on Equity Cost: A Case Study of the Pharmaceutical Industry. jor 2021; 18 (4) :85-102
URL: http://jamlu.liau.ac.ir/article-1-1890-en.html
URL: http://jamlu.liau.ac.ir/article-1-1890-en.html
Department of Accounting, Karaj Branch, Islamic Azad University, Karaj, Iran
Abstract: (1342 Views)
The primary purpose of this study is to rank and evaluate the efficiency of companies operating in the pharmaceutical industry in Tehran stock exchange based on intellectual capital using data envelopment analysis (DEA). The second purpose of this paper is to investigate the effect of intellectual capital efficiency rank on the cost of equity of the mentioned companies.
For this purpose, DEA was used to calculate the performance efficiency rating. Input indicators of the DEA are components of intellectual capital, including human capital, structural capital, capital employed and innovation capital, and output indicators are ROA, ROE, ROS and net EPS. Information and research data from the financial statements of the mentioned companies have been extracted from the stock exchange site during a ten-year period from 2008 to 2017. A multiplier model was used for evaluating the efficiency of the units, and the Anderson-Peterson model was used to rank them. The findings state that the rank of the performance efficiency and equity costs are inversely related. Furthermore, as financial leverage increases, so does the cost of equity. The percentage of institutional shareholder ownership and the company size are inversely related to the cost of equity.
For this purpose, DEA was used to calculate the performance efficiency rating. Input indicators of the DEA are components of intellectual capital, including human capital, structural capital, capital employed and innovation capital, and output indicators are ROA, ROE, ROS and net EPS. Information and research data from the financial statements of the mentioned companies have been extracted from the stock exchange site during a ten-year period from 2008 to 2017. A multiplier model was used for evaluating the efficiency of the units, and the Anderson-Peterson model was used to rank them. The findings state that the rank of the performance efficiency and equity costs are inversely related. Furthermore, as financial leverage increases, so does the cost of equity. The percentage of institutional shareholder ownership and the company size are inversely related to the cost of equity.
Keywords: Data Envelopment Analysis, Performance Benchmarking, Intellectual Capital, Efficiency Rating, Cost of Equity
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