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PurposeThe purpose of this paper is to first examine whether intellectual capital (IC) information is considered in firm valuation. Next, to examine two issues: financial analysts' investment recommendations when faced with different combinations of performance levels (i.e. above or below industry average) of financial and IC measures, and the role of financial and IC measures with different performance levels and holding periods (i.e. short‐term vs long‐term) for the investment on analysts' recommendations.Design/methodology/approachThe first part of the paper used secondary (both archival and survey) data. The second part was an experiment.FindingsThe findings in the first part show that, after controlling for the effect of financial performances on firm value, measures of IC are still significant explanatory variables (of firm value). The second part shows that the financial and IC measures affect financial analysts' investment recommendations differently depending on the measures' levels of performance and the time horizon for holding the investments.Research limitations/implicationsThe limitations of the paper are as follows: the use of secondary data from a single country limits its generalizability; and the results of the experiment are parameterized by the research design such as the amount of information provided to the financial analysts. Extending the analyses to other settings and using time‐series data represent future research opportunities.Originality/valueThe research makes three contributions to the IC literature. First, it extends the studies on the relevance of IC in capital market research by broadening its scope to include measures of IC other than R&D intensity. Next, it provides evidence of the informativeness of IC measures in market valuation of firms and analysts' recommendations, thus lending credence to the arguments of reports and researchers for more external communication of IC information. Finally, this study is one of the first to examine a broader scope of IC in the capital market context and the use of IC by sophisticated market participants. With policy‐makers and standard‐setting bodies considering proposals to enhance information on IC in financial reports, it is important to broaden the scope of IC metrics and understand their role in enhancing firm value to develop a framework for reporting IC.

PurposeThe paper aims to discuss how to integrate the Balanced Scorecard (BSC) with intellectual capital (IC); and handle the issues of creation, formation, measurement, reporting and even management of strategic intellectual capital (SIC).Design/methodology/approachThe paper adopts a case study to illustrate the integration between the BSC and IC, and to handle the significant issues related to SIC. The case company is a car dealership in Taiwan, which is one of the largest automobile dealerships in Taiwan. In addition, according to the firm's management philosophy, the company treats customers as the bosses and employees as the precious assets to the company. The company also treats quality as one of its important competitive advantages, hence implementing ISO 9002 in 1999.FindingsThe main findings of this study are: BSC can lead the creation, formation and measurement of SIC and strengthen the reporting for SIC; BSC's financial, customer, internal process, and growth and learning perspectives can strengthen the management of IC; and, all in all, how to integrate IC and BSC together for implementing a company's strategy effectively and maximize the value of a company deserves further discussion.Practical implicationsBased on this study, companies need to integrate BSC to IC in order to strengthen the creation, formation, measurement, reporting and management of SIC. While BSC directs IC, then the value of SIC can be improved.Originality/valueBased on the literature review, the authors note that BSC is an important tool to measure and manage IC. However, no research illustrates how BSC directs the creation, formation and management of IC. In this study the authors fill this gap and introduce a case to illustrate how BSC affects the creation, formation and measurement, and even reporting of IC.

ABSTRACT
This study examines the influence of in-group identity between supervisors and subordinates and the clarity of the bonus determination criteria on supervisors' discretionary adjustments of subordinates' bonus compensation through the lens of social identity theory. Using field data from a multinational manufacturing company's subsidiary in China, we find that in-group sales agents receive higher bonus awards and that this effect is more pronounced when there is high clarity of the bonus determination criteria. Additional analysis shows that these effects hold for higher-tenured sales agents and in regions characterized by lower sales agent turnover. Finally, we find that higher bonus awards are positively (negatively) associated with in-group sales agents' future performance when there is low (high) clarity of the bonus determination criteria. Our findings hold potential implications for management practices in corporations operating in countries that have strong relationship-based cultures.
Data Availability: Data used in this study are provided by a proprietary source.