The Impact of Corporate Governance on Intellectual Capital. Empirical Evidence from Romanian Companies

This study aims to analyse the effects of corporate governance on the intellectual capital of companies. The sample is composed of 64 companies listed on the Bucharest Stock Exchange in the time span 2016-2021. The data were collected from companies' annual reports and from Thomson Reuters database. In this way, we investigated the relationship between corporate governance, measured as the compliance with the Bucharest Stock Exchange Code of Corporate Governance, and intellectual capital, measured by two different methods: Economic Value Added (EVA) and Value Added Intellectual Coefficient (VAIC). The results showed that there is a positive and statistically significant relationship between intellectual capital and corporate governance. The main results of our study indicate that there is a positive and statistically significant relationship between corporate governance and intellectual capital in all the cases. Furthermore, all the control variables, namely total assets, employee number, and leverage, show positive and statistically significant results. It has been found that intellectual capital and good corporate governance practices can contribute to the wealth creation of firms. Strategic planning, organisation, transparency, and accountability are the cornerstones of a good corporate governance system. These elements improve the quality of the internal control and risk management processes and increase investors’ and other stakeholders' trust. The importance of intellectual capital has been acknowledged by companies as a vital component of their competitive advantage. The outcomes of the present study can be used by policymakers in order to increase the efficiency of companies and to determine the need to invest in human capital.