Milos Petkovic

Eric Cauvin

Nicolas Aubert

Bernard Olivero

2008-2016

Keywords:

There are limitations of the study. One of them is to find adequate financial information about companies that will be used in an analysis and another one is financial information, such as marketing expenses and R&D expenses, which is not always available in the accounts of a company.

Original feature: This study presents the first verification of a positive relationship between investments in intellectual capital components and a company's total book value.

KEYWORDS

RÉSUMÉ

Objectif : Le capital intellectuel est une ressource stratégique qui joue un rôle important dans le processus de création de valeur. L'intérêt pour le capital intellectuel s'est accentué au cours des dernières décennies et s'est accéléré au cours du vingtième et unième siècle, siècle d'idées, de connaissances et d'innovations. Parallèlement, le poids du capital intellectuel joue un rôle de plus en plus important sur le marché financier. La plupart des recherches ont pour but d'identifier le lien entre le capital intellectuel et les performances financières à court terme, telles que le bénéfice, les parts de marché, le chiffres d'affaire ou la valeur boursière. Cette recherche vise à combler les lacunes de la littérature en s'intéressant au contraire à la valeur comptable comme composante essentielle de la valeur totale d'une entreprise. Nous montrons qu'en capitalisant les investissements dans différents composants de capital intellectuel, une entreprise améliore sa valeur comptable totale et de ce fait génère des avantages à long terme.

Méthodologie : Nous avons inclus respectivement 498 entreprises françaises et 475 dans deux modèles de recherche principaux fondés sur une analyse statistique de corrélation complexe.

Les informations financières sont extraites de la base de données financières «Point Risk» pour répondre à la question de recherche principale. Le modèle utilisé dans cette étude est le modèle d'évaluation de la transformation du capital intellectuel (ICTEM) développé par [START_REF] Molodchik | Intellectual Capital Transformation Evaluating Model[END_REF]. Ce modèle étudie comment le capital intellectuel dans se transforme en nouveaux actifs, améliorant ainsi la performance d'une entreprise.

Résultats : Les entreprises transforment et capitalisent leurs investissements dans les composantes du capital intellectuel en actifs concrets de la valeur comptable totale. Les trois principales composantes du capital intellectuel dans lesquelles les entreprises investissent sont: le capital humain, le capital organisationnel et le capital relationnel.

Conséquences et limites : La principale contribution de notre recherche est l'identification du lien entre les investissements dans les composantes du capital intellectuel et la valeur comptable totale de l'entreprise en tant que performance finale. Jusqu'à présent, la valeur comptable totale de la performance finale d'une entreprise n'était, à notre connaissance, pas utilisée en corrélation avec le capital intellectuel et ses investissements.

Les limites de l'étude sont l'absence d'informations financières adéquates sur les entreprises qui sont utilisées dans notre étude. Les informations financières, telles que les dépenses de marketing et les dépenses de R & D, ne sont pas toujours disponibles dans les comptes des entreprises.

Caractéristique originale: cette étude présente, à notre connaissance, la première vérification de la relation positive entre les investissements dans les composantes du capital intellectuel et la valeur comptable totale de la société.

MOTS CLÉS

Capital intellectuel, investissements dans le capital intellectuel, IFRS, IAS

CHAPTER I -INTRODUCTION

This chapter introduces the background, motivation, encouragement and significance of the study. In the global economy based on knowledge, intangible assets often make up to 80 % of a company's value. The transformation of intangible assets and resources into a tangible result is a new way of thinking for most companies. Based on the study of [START_REF] Volkov | Intangible Assets: Importance in the Knowledge-Based Economy and the Role in Value Creation of a Company[END_REF], only from 6 to 30 % of a company's value belong to tangible assets. Because of the importance of intangible assets, companies invest about 50 % in the sphere of intangible assets only, namely in research and development, personnel development, infrastructure [START_REF] Fuller | Knowledge Management Foundations[END_REF]. [START_REF] Van Ark | Measuring Intangible Capital and Its Contribution to Economic Growth in Europe[END_REF] found that investments in intangibles are accounted for about 25% of labor productivity growth in the EU countries over a period from 1995 to 2010. In order to manage intangible assets properly, it is of high importance to measure them in the right way.

The treatment of intangible assets in a company's accounts has been changed drastically. The main decision relates to capitalizing investments in intangibles as this can transform knowledge into a concrete value. However, this is where the greatest difficulty lies, because organizations must measure these investments consistently and systematically over time [START_REF] Bloom | Why Do Management Practices Differ across Firms and Countries?[END_REF][START_REF] Belo | Brand Capital and Firm Value[END_REF].

According to [START_REF] Penrose | The Theory of the Growth of the Firm[END_REF], one company is not only an administrative organization, but also a set of resources: productive and human. Resources should be included in the production process and transformed into products or services. Outputs are functions and results of experience and knowledge a company has. This philosophy started developing in the 1980s and serves as a confirmation of the statement made by Nonaka and Takeuchi (2007) that only those companies that create knowledge can be successful in today's world. Based on the study developed by Marr (2004), a firm's capability is to realize and achieve greater future performance based on the knowledge that lies within a company. What differentiates companies is the specific and unique knowledge. Firms with more knowledge will be more powerful and competitive (Marr, Schiuma, and Neely, 2004b). Knowledge society will be dependent on intellectual capital because knowledge and information have become economy's primary raw material and most important outcome [START_REF] Stewart | Intellectual Capital: The New Wealth of Organizations[END_REF]. [START_REF] Drucker | Post-Capitalist Society[END_REF] thinks that when entering a knowledge society "the basic economic resource is the knowledge" (see also Nonaka and Takeuchi, 1995;[START_REF] Quinn | Intelligent Enterprise: A Knowledge and Service Based Paradigm for Industry[END_REF][START_REF] Reich | The Work of Nations: Preparing Ourselves for 21st Century Capitalism. 1st Vintage Books ed[END_REF][START_REF] Toffler | Powershift: Knowledge, Wealth and Violence at the Adge of the 21st Century[END_REF].

Background of Study

Nowadays, intangible assets are playing a key role in company performance. Two major forces have led them to that position over the past few decades: globalization and advanced information technology. In a highly competitive global market, intangible assets are the key success factor because knowledge assets provide a competitive advantage. Understanding the valuation of intangible assets is the basis of management decision processes.

Resources can be presented in three main forms: tangible, financial and intangible which are combined with three ingredients: resources, flows and transformation of resources. From the intangible resource perspective, they do not possess a physical form. On the contrary, their importance can be seen as the hidden wealth of companies and national economies. [START_REF] Drucker | Post-Capitalist Society[END_REF] thinks that intangible assets lead to a process of transformation and progress of a society.

In a "knowledge society", performance is not achieved by the allocation of labor or capital, but by innovations and ideas. Drucker emphasized three phases of development; the first one when companies used their knowledge only for the purpose of producing their equipment, products and services; the second one, when their knowledge was used to improve labor processes by companies, and the final phase, when companies used knowledge to improve their own knowledge base. Chronologically, these phases tightly followed the industrial revolutions throughout the development of humankind [START_REF] Drucker | Post-Capitalist Society[END_REF].

Today, when the market is global and highly competitive, the life cycle of products and services is becoming shorter, which requires companies to continuously work, stay unique and innovative. What cannot be copied and imitated are knowledge, innovations and new ideas.

There are many studies that prove how important intangible assets are for company performance. Taking into consideration that intellectual capital is not-physical and that it belongs to the people's mind, it is very hard for companies to obtain that value for themselves.

Companies usually try to transform that human capital or knowledge into an intangible, formulized and conceptualized asset that is recognized by the international accounting standards (patent, trademark, copyright, prototype, customer list, marketing campaign, etc.). Also, when compared to tangible assets, the growing importance of intangible assets shows that the internet connection is more valuable than the whole computer, or that electronic components are more important than some piece of metal. The management of intangible and tangible assets has also changed because most of the knowledge-based companies cannot present their values in the balance sheet having in mind that they possess enormous added-value and profits on the total market value, which is an external component and income statement (profit and loss account). This is the key proof that ideas, innovations and knowledge drive the performance and lead to a competitive advantage (Nakamura, 2003;[START_REF] Stewart | Intellectual Capital: The New Wealth of Organizations[END_REF].

Significance of Study

During the last two decades, the business and global environment have progressively been transforming into a knowledge-based fast-changing, technology-intensive company in which investments in human resource, information technology and research and development have become essential for the purpose of improving a company's competitive advantage and final performance (Canibano et al., 2000). Itami and Roehl (2009) suggested that resources consist of physical, human and monetary resources which are necessary for business operations to take place and information-based resources, such as management skills, technology, consumer information, brand, reputation and corporate culture. [START_REF] Sullivan | Value-Driven Intellectual Capital: How to Convert Intangible Corporate Assets into Market Value[END_REF] thinks that many information technology knowledge companies such as Microsoft, Xerox, Dow Chemical, HP, Eastman Chemicals and others have their marketplace value at a price much higher than their balance sheets accounts. [START_REF] Goldfinger | Intangible Economy and Its Implications for Statistics and Statisticians[END_REF] claimed that a company's value is more than intangible assets, and that the source of its value and wealth is no longer the production of material goods, but the manipulation and creation of its intellectual assets.

The significance of this study is to address the importance that investing in intellectual capital and its components has on the performance of French companies. French companies that are included in the sample belong to different industries and they create different values in the process based on the industry they belong to.

Another significance is to inspire future managers to, first of all, invest in their company's intellectual capital on a long-term basis mainly because it will produce more constant and longer benefits for the company. These kinds of benefits are not possible without capitalization and transformation processes within a company. It is up to managers to make decisions regarding this issue and to capitalize investments because, otherwise, investments will remain only as expenses in a company's accounts.

Research Motivation

Taking into consideration that we are living in the "New economics era", intellectual resources are of high importance for an entity to compete and survive on the global market. In order to create a new competitive advantage, companies cannot rely completely on traditional financial reporting tools, mainly because they are not reliable enough for top management decision processes. The process of creating values and making decisions is not possible if only traditional financial reporting tools are used. That is why it is highly important for each company today to combine these traditional tools with non-financial performance measurements and this represents the biggest potential challenge that the accounting framework is facing nowadays.

Fierce global competition forces many companies to be more unique and competitive in order to achieve necessary advantages. Potentially reaching a new competitive advantage can be costsaving for a company in the percentage of no less than 45 %. These results were obtained in 1997 by [START_REF] Goldfinger | Intangible Economy and Its Implications for Statistics and Statisticians[END_REF] and we can see how the situation started changing at that time. This huge potential is very often not understood enough in the best way because it is up to a company to realize what is fundamental for various markets and their customers, and also for diverse sophisticated technology and integrated processes [START_REF] Colotla | Operation and Performance of International Manufacturing Networks[END_REF][START_REF] Dossi | The Missing Link between Corporate Performance Measurement Systems and Chief Executive Officer Incentive Plans[END_REF][START_REF] Jacob | Why Go Global? The Multinational Imperative[END_REF].

Dynamism and specialization of different disciplines as well as complexity of advanced technology in the current business environment have caused dramatic discrepancies between various functions and departments inside a company. Reaching strategic objectives efficiently is not possible without a total linkage between all departments, organizational levels and functions. A huge lack of coordination between the flow of information, data, products, services, processes across organizational system has become of a major concern [START_REF] Wahlers | Competitive Factors and Performance Measurement: Applying the Theory of Constraints to Meet Customer Needs[END_REF].

In order to remain unique and different on the global market, companies pay more attention to intellectual capital such as skills of employees, know-how, software, patents, brands, databases, customer databases etc. Effective and efficient management of these intellectual resources leads to the production of new values and benefits. Reporting and measuring the whole process has crucial consequences not only for all the members of the company, but also for the general public and investors.

All the above mentioned reasons influenced the research motivation to choose a topic that will not only be, current and modern, but also practically probable. The interest of intangible assets, intellectual capital, investments in intellectual capital, knowledge management, performance measurement is of higher or lower importance in each sector of activities, in each company. It is becoming more and more common for companies to integrate intellectual capital and some of the components of intellectual capital in their official annual reports, which is a sign that companies are paying much more attention to it nowadays. Academics have been exploring these topics intensively through their profession or otherwise during the last two or three decades which is confirmed by a large number of publications from all around the world. Since a lot of academic and empirical work regarding the given topic has been done until now, the development of advanced technology, the Internet, start-ups, intangible assets, etc. comes as no surprise. Academic work has just pointed to the potential that will emerge in the future.

Encouragement for Research in Intellectual Capital in French Companies

The focus of this part is to further explain my main encouragement to do the research focused on intellectual capital in French companies. The French companies that are used in the sample belong to different industries and are of different sizes. The sample includes companies ranging from start-ups and small companies to large multinational corporations. I tried to emphasize the potential of intellectual capital and investments in intellectual capital in French companies and explain why it is important to understand and invest in it.

The book published by [START_REF] Hollanders | Regional Innovation Scoreboard 2016 -Methodology Report[END_REF] proves that French Economy is highly innovative. Innovative performance increased in the period from 2008 to 2012, declined briefly from 2013 to 2014, and continued increasing again from 2015 until today. The innovative performance is 10 % higher than the European average in 2010, and it is 9 % higher than the European average in 2015. French strength lies in Open, excellent and attractive systems and Innovators. The best performing indicator is seen in Non-EU doctorate students who have the opportunity to start and successfully realize their research in France. Furthermore, France has marked highly positive growth in most of the indicators, such as license and patents, international scientific co-publications and new doctorate graduate papers. The French economy distinguishes itself from other European economies by high growth in SMEs innovating in-house, innovative collaboration of SMEs and product/service innovations.

According to Triki-Damak and Halioui (2013), France as a country spends a lot of resources on innovations. France is 10 th most innovative country in the European Union that invests 1.31 % of GDP in R&D expenditures. According to [START_REF] Boujelbene | R&D expenditures and earnings targets: Evidence from France[END_REF], France is seen as the second most R&D intensive country in the European Union by the Economics of Industrial Research and Innovation (EIRI).

Based on the study of Department for Business Innovation & Skills (2012), France occupies 7 th place in Europe regarding the level of investments in intangible assets. Based on the same study, France spends 1.2 % GDP on Scientific R&D, 2.3 % on organizational competence (excluding trainings) and 4.1 % of GDP on other investments in intangible capital, which is almost 10 % of GDP in total.

According to the study done by [START_REF] Barnes | Investments on Intangible Assets and Australia's Productivity Growth[END_REF], France has the following intangible to tangible investment ratio: Table 1: Percentage of output (including intangible investment) for the sector for which intangibles were measured [START_REF] Barnes | Investments on Intangible Assets and Australia's Productivity Growth[END_REF] France -market sector ( 2004)

Computerized information 1.3
Innovative property 4.7

• Scientific R&D 2.0

• Mineral exploration 0.0

• Copyrights and license costs 0.5

• Other product development, design and research 2.2

Economic competencies 6.6

• Brand equity 1.5

• Firm-specific human capital 2.3

• Organizational capital 2.8 TOTAL 12.6 Intangible to tangible investment ratio 0.9

As we can see, scientific R&D, other product development, design and research in the part of innovative property, and firm-specific human capital and organizational capital in the economic competency part all play a crucial role with the biggest ratio in the whole French economy. In all three main measurement indicators, computerized information, innovative property and economic competencies are higher than 1.0 in total which means that companies invest more in intangibles than in tangible assets. These ratios are the main proof that the French economy is highly innovative [START_REF] Barnes | Investments on Intangible Assets and Australia's Productivity Growth[END_REF].

OECD (1998) did a study about the investments in intellectual capital and intangibles based on the French experience. French economy is becoming rapidly intangible, and it includes large investments that are focused on intangibles as well. Intellectual investments are completely opposite from tangible physical investments. Investments in intellectual capital are expenditures of companies that will: a) improve company's production capacities; b) accumulate capital for future utilization; c) have an asset form that is tradable. This is general explanation, whereas practically speaking, investments in intellectual capital in France can be divided into the following four areas:

1) Research and development (R&D);

2) Software;

3) Commercial activities; 4) Training.

Organization of Thesis

The structure of work is composed of five main chapters. The purpose and importance of the study are described in the first part of this work. The introductory part answers the following two questions: "What is the phenomenon that I observe?" and "Why is this phenomenon relevant today?". Taking into consideration numerous explored studies in the given field until now, the research study offers a completely unique approach and results that will contribute to the science management in the end. This chapter presents personal motives to discover and explore intellectual capital, investments in intellectual capital and its value creation processes.

The observed phenomena are focused on the evidence found in French companies in the given time period. France was used as a sample because of its innovativeness and creativity in economy, large amounts of invested financial resources that are focused on intellectual capital and competitiveness. These reasons encouraged us not only to write a project that will contribute to this topic, but also to present French economy as it really is.

The second chapter presents the main literature which is highly related to the topic in a more detailed way. This chapter answers the question: "Which known and unknown literature deals with this topic?". We will substantially explore all theoretical material from the most wellknown authors in the literature review part of this work. The literature review presents the following key parts: intangible assets, intellectual capital, investments in intellectual capital, knowledge management and performance measurement systems. The following five theoretical topics are organized in the way that will enable an independent reader to explore the subject easily. This exploration will make it possible for a reader to better understanding the main research problem, research questions, research solutions and empirical results. The literature review part presents the main studies, the most important authors in the field that influenced the research philosophy and the latest achievements. Deep understanding of the explored literature allowed me to find the theoretical gap that will present the biggest scientific contribution.

The third chapter presents the main research methodology that shaped the whole work, starting from the defining research problem, theoretical gap, research methodology, conceptual framework, justification of variables, research process plan, research hypotheses, research theories and research models. This chapter answers the following questions: "What is the research question? "How are we going to answer the research question?", "What is the concept that I made?". Without precisely defining the research methodology used in the work, the chances to fail are high. This part describes the main theories and models used in the work that inspired and explained the research in a more scientific manner.

The fourth chapter explores the empirical research that explains and proves the whole study.

This chapter answers questions such as: "What have I found out from my research?", "What is the meaning of research results?", "What contribution to literature do my research results

have?". The findings are organized based on the given variables, starting from the description of a sample coupled with research hypotheses. The proposed variables are statistically tested, which leads to establishing strength among variables in the end. Each variable is determined based on deep justification by only the most relevant literature, by the well-known authors in the field. The empirical part presents data sample used in the observation, movements of each variable, descriptive statistics, Pearson correlation, complex regressions and final discussions about the findings.

Finally, the fifth chapter concludes the dissertation with key findings and results. The conclusion chapter answers the final questions: "Why should we pay attention to the given phenomena and why is this important to us?". The biggest advantage of the quantitative study is that it is completely practically applicable in every company around the world. The final results would have been unattainable if it had not been for the huge motivation and enthusiasm that guided me till the end. Furthermore, it is very important to highlight not only the biggest research limitations and problems that occurred during the research, but also contributions to science. The conclusion part is a summary of recommendations, directions and ideas for future personal research. 2.1.2 Concept of Intellectual Capital ............................................................................... 2.1.3 Investments in Intellectual Capital .......................................................................... 2.1.4 Relation between Intellectual Capital and Performance .................................... 2.2.4 Knowledge Management Systems ......................................................................... 2.2.5

CHAPTER II

LITERATURE REVIEW

CHAPTER II -LITERATURE REVIEW

The second chapter of the thesis is focused on the exploration of all the relevant, but closely related well-known articles, books and achievements in the given research areas. The literature review in this chapter is a combination of literature from the well-known authors who contributed to the intellectual capital subjects starting from 1950s until now. This flow of literature is important for each independent reader to follow all the most important theoretical achievements in the field of intellectual capital.

The study starts by exploring intangible resources and intangible assets in the current corporate world: the importance of intangibles nowadays, their roles, main definitions, classification and characteristics, valuation procedures and opportunities for investing in them. It is important to start with intangible assets because intellectual capital and investments in intellectual capital topics stem from them.

After developing the intangible asset part, intellectual capital is explained in a more detailed way followed by the most known authors. The concept of intellectual capital is composed of the main definitions, classifications, measurement methods, reports, investment possibilities and relations with other final performance.

Next section is related to knowledge management. Both knowledge management topic and intellectual capital are two very popular topics nowadays and they cannot be set apart because intellectual capital is seen as a static component of one company, whereas knowledge management is seen as a dynamic one. Knowledge management is the process of creating value, where intellectual capital represents the critical mass that produces a new value.

The final part is focused on the performance measurement systems that are implemented in most of the corporate systems. These systems propose mechanism for following value creation and benefits within a company.

Intangible Resources in Corporate World

Role of Intangibles

Adam Smith's book of 1776 "The Wealth of Nations" (see newer edition of [START_REF] Smith | The Wealth of Nations[END_REF], which was regarded as a classical school of economic theory, stated that the wealth of a nation comes from tangible or physical assets only, or to be more precise, from production factors such as labor, land and capital.

Nowadays, this theory is no longer meaningful in this modern knowledge-based economy [START_REF] Wang | Investigating Market Value and Intellectual Capital for S&P 500[END_REF]. Global economy has dramatically changed during the last thirty years. The change in the form of transition from industrial capitalism to knowledge-based capitalism was a revolution in the corporate world. Tangible or physical assets no longer represent the core of knowledge-based economy. Instead, intangible assets are now seen as its core. Even though there is no particular definition of knowledge-based economy, three main structural changes appeared (MERITUM project, 2002):

1) Knowledge is seen as an object of potential trade;

2) Interrelation between different knowledge has been improved;

3) Information and Communication Technologies (ICT) enable higher diffusion of knowledge by allowing development of new and sophisticated networks between subjects of knowledge.

These three structural changes completely modified the global business model of companies that was available in the previous industrial revolution. Based on the huge development of the Internet and advanced technology, data, information and knowledge are widely spread and available. In the process of sharing and collecting necessary knowledge, companies improve their businesses much more easily.

Technology that is based on knowledge lies at the core of the development of each company, where information management represents the input and knowledge management represents the production process of the final output. Companies face many difficulties in the process of identification, measurement and recognition of intangible assets. To prevent these problems from arising in the following years, research efforts should be focused on understanding how knowledge is produced and used to generate a future value. In addition, the development of new accounting practices that identify indicators of intangible assets more precisely is necessary in order to improve financial reports regarding a company's intangible assets. In the field of management sciences, the lack of identification of outcomes stemming from intangible assets results in the loss of business opportunities. In that way, managers and decision makers in companies stop investing in intangible assets because it is impossible to follow final performance, and this is a huge mistake (MERITUM project, 2002).

Intangible resources can also be analyzed in very dynamic terms. Companies more often take initiatives to acquire or develop internally intangible assets, to improve current ones, and to measure and control them. Undertaken activities are often very costly, so the measurement of performance is not always possible. These dynamic activities that are related to the allocation of these assets or investments are not expressed in financial statements, generally because there are no standardized obligations for companies to do so, so they do not appear in the corporate annual reports. The problem is to follow and monitor the performance of each intangible as well as to evaluate the final results of those connectivity improvements [START_REF] Sánchez | Project Funded by the European Community under the Targeted Socio-Economic Research (TSER)[END_REF].

Our society has dramatically changed due to the global influence of information and technological changes through favoring globalization of economy and innovation as key factors of global competition. It is interesting that, nowadays, the total market value of a company is composed of almost 90 % of intangible assets value, mainly because current accounting frameworks do not provide an adequate system for a company to make long-term decisions.

From the agricultural age to industrial age, there were a lot of changes. The best proof for that is the proportion evolution, starting from 1978 when intangible assets constituted only 5 % of total assets, then in 1998 when it was 72 %, and finally recently when this proportion improved even more and the interval is between 75 % and 85 % [START_REF] Ciprian | From Visible to Hidden Intangible Assets[END_REF]. From s1990s, significant changes happened in the asset composition structure. From 1980s, the book value of companies started changing compared to market value. Between 1982 and 1992, the value of intangible assets increased from 38 % up to 62 % of the market value, but the book value decreased from 62 % down to 38 % ( Lev and Daum, 2004). Lev (2001) stated that in the period between 1998 and 2001, the total market value of US Standard and Poors (S&P) 500 biggest companies increased from less than 1 % up to over 5 %, as a result of which more than 80 % of a company's value did not appear in a financial report. [START_REF] Edvinsson | Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower[END_REF] explained that the limitation of financial statements in presenting

Definitions of Intangible Assets

By the International Accounting Standard 38, intangible assets can be defined as an "identifiable non-monetary asset without physical substance". An asset is a potential resource if it can be adequately controlled based on the past events and based on which future economic benefits are expected to flow into the company (IAS Standard 38 -Intangible Assets, page 6).

According to FASB ( 2001), an intangible asset is defined as a "non-current, non-financial claims to future benefits that lacks a physical and financial term" (Financial Accounting Standard Board (FASB), 2001).

Based on both previous accounting standards, the control of intangible assets is similarly explained. A company has control over an intangible only if there is a power to obtain future economic benefits stemming from the usage of that asset, and if it can also restrict future benefits at the same time (Zéghal and Maaloul, 2011).

When talking not only about the control over intangible assets, but also about the protection of employees' skills, knowledge and techniques, then the problem very often occurs. Employees' specific skills, techniques or knowledge that they possess and that they bring with them to the company do not belong to the company, even if a company invests in their education or training at certain occasions. The main problem happens when the very worker who was trained leaves the company. All invested trainings remain as company's costs, without precise returns. These investments in intangibles cannot be capitalized because of missing contractual link between a company and an employee, an investment and employee's skill (Lev, 2003).

Entities can very often expand their activities onto new acquisitions, research and development, maintenance, scientific or technical work, implementation of new processes, licenses, intellectual property, market knowledge, trademarks, computer software, customer lists, market shares and rights, etc. If an item based on the definition above does not meet the requirements of definition, expenditures to acquire or all expenses for internal development are seen as an expense. If an item is acquired through a business combination, then it will be recorded partly as the goodwill on the day of the acquisition (IAS Standard 38 -Intangible Assets, 2001).

Until now, there have been many different definitions of intangibles. Intangible can be used both as a noun and an adjective. That is why it is difficult to determine its correct definition [START_REF] Sánchez | Project Funded by the European Community under the Targeted Socio-Economic Research (TSER)[END_REF].

There are dilemmas both in theoretical and professional sphere which relate to the meaning and the main notion of the term "intangible". The term "intangible" is very often wrongly interpreted as some other non-tangible form, such as intangible investments, intangible capital and intellectual capital. Moreover, the literature review throughout different disciplines emphasizes several other concepts that can be seen as synonymous with the terms "intangible capital", "intellectual capital", "immaterial capital", "knowledge capital" or "goodwill" (Zéghal and Maaloul, 2011).

As presented above, there are several very similar synonyms that explain intangible assets, and they are summarized here: "intellectual capital", "intangible resources", "immaterial capital", "immaterial resources", "intellectual property", "invisible assets", "immaterial values", "intellectual knowledge". Based on these different terms, a review of the most important definitions by different authors of intangible assets will be presented in the following table: [START_REF] Smith | The New Role of Intellectual Property in Commercial Transactions[END_REF] Intangible assets include all components of business entity that exist with current and non-current assets. Those are components that, together with current assets and noncurrent assets, allow functioning of a company, and often contribute to the profit of a company. Their existence depends on the presence or expectations of future incomes. [START_REF] Edvinsson | Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower[END_REF] Intangible assets do not possess physical appearance, but they are of great importance to the company. [START_REF] Cañibano | Accounting for Intangibles: A Literature Review[END_REF] Adjective that follows different concepts such as resource and investments.

Granstrand (2000)

Intellectual property is a property that is directly related to creativity, knowledge and identity of an individual. [START_REF] Brennan | Intellectual Capital: Current Issues and Policy Implications[END_REF] Capital based on knowledge in the company. [START_REF] Harrison | Profiting from Intellectual Capital: Learning from Leading Companies[END_REF] Knowledge that can be converted into profit.

Lev (2001)

Intangible assets put the rights of future benefits that do not have physical or financial substance. There is a further explanation about the difference between intellectual capital and intangible capital. Based on the deep exploration of literature, intellectual capital is always seen just as a subset of intangible capital when "intangible" is related to an asset without physical substance and with certain future economic benefits [START_REF] Hunter | Measuring Intangible Capital: A Review of Current Practice[END_REF].

Based on the book "Unseen Wealth -Report of the Brookings Task Force on Intangibles" published by Blair and Wallman (2001), there is a much more comprehensive distinction between three major categories of intangibles:

1. There are two main sub-categories of intangibles for all intangible assets for which the market already exists and property rights are clear, and those are: first of all, patents, brands, copyrights, and second of all, contracts, data bases, licenses and business agreements;

2. When there are no legal and well-defined rights, a group of intangibles for all intangibles that are controlled by a particular company is composed of: R&D in process, reputational capital, business processes and business secrets;

3. When both market and legal and property rights do not exist or are very difficult to identify for all the other intangibles, a group of intangibles consists of human, structural and relational assets. All of these assets belong to intellectual capital as its main components [START_REF] Bontis | Intellectual Capital: An Exploratory Study That Develops Measures and Models[END_REF]. [START_REF] Ashton | Intellectual Capital and Value Creation: A Review[END_REF] gives further explanation of the guiding principles for Blair and Wallman's (2001) classification of intangibles. This classification shows the level of difficulty to record them in official financial reports and to treat them properly not only for accounting standardsetters, but also for managements of companies. The last third category causes the biggest problems mainly because there are no accounting standards for them yet, whereas the first and second group of intangibles are already well-determined [START_REF] Ashton | Intellectual Capital and Value Creation: A Review[END_REF].

One investment in an intangible asset can be recorded in the official financial report if it has the same definition of an intangible asset and meets all accounting criteria. Attention should be more paid here because only few investments can meet all the necessary criteria [START_REF] Siegel | The Measurement and Recognition of Intangible Assets[END_REF].

In certain occasions, a company may not include intangible assets in the balance sheet, even though they meet all the demanded requirements. Based of IAS 38 and FASB, SFAC 5, one of very important requirements is the possibility to "measure asset cost". This requirement raises another accounting problem because this requirement would be easily met if that asset was acquired or obtained from a business combination. In that way, it would be easy to separate it and identify the value. The main problem lies in all intangible assets that are internally developed, such as computer software, brands, patents and results of research and development activities [START_REF] Upton | Business and Financial Reporting, Challenges from the New Economy[END_REF].

Characteristics of Intangible Assets

Intangible assets have two main characteristics, which, at the same time, differentiate them from tangible and financial assets, and those are [START_REF] Warfield | Intermediate Accounting: Principles and Analysis[END_REF]:

1. The lack of physical existence. Intangible assets possess only legal rights and privileges granted to a company to use them. Based on these rights and privileges, a company generates benefits;

2. They are not financial instruments. Financial assets also do not represent physical substance, but when compared to intangibles, financial instruments have the value because they can claim or have the right to receive cash or cash equivalents in the future.

Intangible assets can be purchased or developed internally. Intangibles bought from another organization are recorder in financial statements as cost. Cost includes all costs of acquisition and expenses necessary to make intangible assets ready for usage. Typical costs are legal fees, purchase price and other expenses. Internally created intangible can be both expensed and capitalized. From the financial accounting perspective, the crucial aspect is to elucidate whether to expense or capitalize. If it is expensed, all the expenses will be recorded in the profit and loss account. If it is capitalized, an item must fulfill several restrictive requirements; notably, it must be separable and reliably measurable. Intangible assets can have limited life or indefinite life.

Limited-life intangibles have a precise period when they can be used. These assets must be amortized or systematically allocated to the costs of intangible assets. After that period, intangible assets must not be used anymore, and should be excluded from the property and annual report of a company. On the other side, indefinite-life intangible assets are all intangible assets without legal, regulatory, contractual or any other factor that limit the useful life cycle.

There is no foreseeable limitation period for these intangible assets over which the asset will provide cash [START_REF] Warfield | Intermediate Accounting: Principles and Analysis[END_REF].

Items seen as intangible assets are included in the balance sheet together with long-term assets or non-current assets and further explanations are given in the notes of financial statements.

However, there are no further explanations even in the notes of financial statements as to how these assets have been produced, made or acquired. There is no evidence of expenses in profit and loss account that is related to some of the intangible asset internal development. There is nothing else inside the balance sheet apart from the intangible assets that already meet all the necessary criteria. So, here is one very problematic part for all those individuals who want to see the efficiency of investing into some of the intangible assets [START_REF] Caddy | Intellectual Capital: Recognizing Both Assets and Liabilities[END_REF][START_REF] Harvey | Balancing the Intellectual Capital Books: Intangible Liabilities[END_REF].

Based on the study published by the Center for Excellence in Accounting and Security Analysis in 2009, there are two main preliminary points regarding intangible assets [START_REF] Penman | Accounting for Intangible Assets: There Is Also and Income Statement[END_REF].

1) Intangible asset has a speculative characteristic. Intangible assets are not only without physical substance, but they are also not identifiable, such as contracts or customer lists which can help a company generate benefits. Legal rights, patents and copyrights or brands are exceptional because of that. However, the difficulty is seen in "customer relationships", "organizational capital", "human capital", "knowledge assets", and similar because they are not specific and conceptualized enough, which makes it hard for their market to be defined. The market price of these assets is highly speculative, subjective, non-realistic. The market price is usually formed based on the personal perspective of an owner. When a speculative value enters the financial statement, problems happen because a non-realistic value can create imbalance in the reports.

2) Intangible assets are used jointly. Most of the intangible assets generate inflow of cash or cash equivalents, and they do so jointly with some other tangible or intangible assets.

Different intangible assets, such as brands, marketing campaigns, distribution networks work together with other assets, and it is impossible to imagine their work independently. For instance, "knowledge capital" works together with productive machines and processes, marketing and management, but the cash flow streams only one cash inflow. Also, "organizational capital" makes it possible for many different company's assets to be used jointly. An organization can be seen as one big asset composed of these several smaller tangible, intangible and financial assets that coordinate together and that are a source of future value.

According to Lev (2005), intangible assets differ from other types of assets, tangible and financial, in two major aspects: partial excludability and non-marketability (Lev, 2005).

When an individual owns a building or share, he/she can completely collect all related benefits from it without any difficulties. On the other side, owners of some intangible assets are in a completely different situation. Even though an individual owns an intangible asset and it expires in 20 years, competitors may explore and develop similar patents or an intangible asset before that. That is problematic from the cash and income perspectives because it is necessary to have stable cash inflows in the company in order to value intangibles. The consequence of unstable cash flows is not tightly regulated property rights over intangibles as they should be.

Most of the tangible and financial assets can be easily traded on a market, which is not the case with intangibles. There are transactions in some of the intangibles, precisely licensing and sales of patents, but generally, these transactions are not transparent and disclosed publicly. The reason for not being publicly presented is seen in not resolved and precisely defined property rights. The non-tradability of intangible assets represents a serious issue for investors and decision-makers because there are no particular valuation methods. The valuation process is only possible when comparing values between highly similar intangible assets, and, even then, it is not correct enough. This characteristic of intangibles created problems to accountants mainly because they cannot be seen as assets in the balance sheet of financial statements.

Taking into consideration that intangible assets are highly risky, with uncertainty in cash incomes, why are they so important today? The answer can be found in two main explanations, and those are: intensity of business competition and commoditization of physical assets. The second answer is commoditization of physical assets. Commoditization of physical assets means that all competitors can allow themselves to have equipment, production machines, tools or advanced technology. Technology and equipment are widely available to all competitors who have the possibility to pay. This is one of the most important differences between intangible and tangible assets. Tangible assets are not so unique today as they used to be in the industrial era when only the biggest companies could afford themselves the most sophisticated tools and equipment. Now, the situation has changed, and they are available more or less to all.

The biggest advantage can be achieved through intangibles (Lev, 2005).

The attention to intangible assets and their importance is paid mainly by the following constituencies (Lev, 2001):

1) Managers and their shareholders. -Investments in intangible assets are associated with high cost of capital. Managers are interested in alleviating the excess cost of capital.

2) Investors and capital market regulators. -Investors are interested in information obtained from companies' insiders and outsiders.

3) Accounting standard setters. -The lack of accounting standard regarding intangible assets results in financial statements that do not follow changes in the current business environment.

4)

Policymakers. -The lack of standards and financial statements demand public policy makers to assess fiscal policy, support innovations, or protect intellectual property.

Lev and Daum ( 2004) addressed two main issues about intangible assets; first, intangible assets by themselves cannot create value or generate profit. They need to be combined with other production factors. They need efficient support and system in order to create future value.

Corporate performance reports must provide much more efficient view that will allow investors and managers to follow the value creation process; second, the value of intangible assets is related to future, not to present. Intangible assets represent possibility for future potential growth and profitability. It is achievable only with a more dynamic system of reporting that will replace the current, traditional performance management system.

Classifications of Intangible Assets

The Some intangible assets remain intangible even under goodwill. Others will find physical intangibility and be recognizable by accounting standards. Even though they are financially tangible, they can be identified and separately valued. These assets can be explained as:

"tangible intangibles" [START_REF] Vaughan | Give Intangible Assets Useful Life[END_REF]. The difference between ascertainable and unascertainable useful life cycle of intangible assets will be described in the following table

Water rights

As stated in the Table 3 above, in the part of ascertainable useful life of intangible assets, there are all intangible assets recognized by the current international accounting framework. All of them can easily be separable and identified by their real value. This is important because once the useful life cycle of an intangible asset is established, assets can be amortized. This is very common for patents for instance. On the other side, in the part of unascertainable useful life cycle of intangible assets, there are many intangible assets that can belong to some of the components of intellectual capital as well, for instance, all employees' skills, knowledge or techniques in the part of human capital. But, unfortunately, it will remain absolutely inseparable. This is damageable because a lack of precise useful life cycle of an intangible asset will not permit a company to amortize its usage. This is an example which relates to brand names or trademarks because, for them, a company cannot establish reasonable life expectancies, so they stay mostly in the goodwill category.

are all those intangible values that are not yet recognized by the accounting standards and that cannot be included in the balance sheet.

Van [START_REF] Wieringen | Social Context and Effectiveness of Professional Training[END_REF] proposed a classification of intangible assets on the concept of balanced scorecard developed by [START_REF] Norton | The Balanced Scorecard -Measures That Drive Performance[END_REF][START_REF] Kaplan | Strategic Learning & the Balanced Scorecard[END_REF]. The ten key categories were identified, and those are ( Van Wieringen, 1997);

1) Research and Development;

2) Acquisition of intellectual property rights and licensing;

3) Acquisition of industrial property rights;

4) Advertising and other marketing;

5) Acquisition and processing of information;

6) Acquisition of software;

7) Reorganization of management in a company; 8) Reorganization of accounting system in a company; 9) Dealing with all changes in legal, governmental, fiscal, social and economic policies; 10) Other investments in the innovation of products or processes in a company.

Based on the book of [START_REF] Warfield | Intermediate Accounting: Principles and Analysis[END_REF], intangible assets are classified in the following six categories:

1. Marketing-related intangible assets are used by a company for marketing purposes or promotion of its products or services. For instance, trademarks or trade names, newspapers, mastheads, non-competition agreements or internet domains are examples of these types of intangible assets;

2. Customer-related intangible assets come from the interactions with external parties.

Examples include customer lists, production backlogs, contractual and non-contractual customer relationships;

3. Artistic-related intangible assets are ownership rights to plays, literary works, musical works, photographs and video material. Copyrights protect these ownership rights. 6. Goodwill is an intangible asset that comes when one company purchases another with a premium value. Goodwill is seen as an intangible asset because it does not have a physical component.

Valuation of Intangible Assets

The methods of measurement and valuation of intangible assets are a matter of considerable interest to investors, decisions-makers, managers, and accounting-standard setters.

Unfortunately, important decisions are not easy to make because of a missing adequate measurement system. Due to the lack of these measurement and valuation tools and increasing importance of intangibles, the performance of one company cannot be evaluated realistically based only on financial performance measurement systems. Calculating the value of intangible resource value as a difference between the total market value and total book value is not sufficient because of two reasons: there is no necessary mispricing in capital and markets and the balance sheet value is historically oriented and limited (Lev, 2003). [START_REF] Walliser | La mesure comptable des marques à l'heure de l'intégration européenne : une disparité préoccupante[END_REF] explained that there is a disparity between accounting and valuation methods of intangible assets, more precisely of brands. The disparity comes from the doctrinal differences related to brand recognition done by using various valuation methods mainly in three principal European countries, France, Germany and UK. [START_REF] Sveiby | The Intangible Assets Monitor[END_REF] emphasizes three main reasons why companies do not want to measure intangible assets, and those are:

1) Managers do not understand the importance of intangible assets;

2) Selected indicators can provide too much information for competitors;

3) Lack of rigorous theoretical model for such a type of reporting.

In order to valuate one intangible asset, it is necessary to identify and classify them and this can be practically very difficult. An appraiser has no guidelines or rules to follow. The appraiser must have a rich experience, realistic and objective judgement and common sense. The main difficulty is to identify economic principles of an asset. The first thing that has to be done is to establish the present value that will generate future economic benefits in the form of capital or income, or both. When the present value has been established, it is important to allocate benefits to a particular tangible, intangible or financial asset, and this is where the biggest difficulty lies.

In order to facilitate the benefit allocation, there are some recommendations given by Vaughan (2009):

• First, it is important to estimate operating incomes before depreciation, amortization, income taxes or interest charges. In that way, pure and total value of the operating income of a company will be seen;

• Second, allocation of depreciation amount must be done only for fixed assets;

• Third, ascertainable intangible assets must be isolated, and the amortization required to compare it with investment over the remaining value of each asset must be computed.

Then it will be necessary to subtract all the annual depreciation and amortization from operating income in order to calculate a return of investment;

• Fourth, result from available income should be subtracted in order to calculate the income assigned only to goodwill;

• Finally, it is required to capitalize the remaining income at an appropriate rate to come to the value of goodwill.

According to Lev (2005), there are three approaches that are used to measure and valuate intangible assets, and those are: benefit allocation, stand-alone valuation and comprehensive valuation of enterprise intangibles.

Benefit allocation approach can be used only when it is easy to allocate benefits to individual intangibles under certain circumstances. It is necessary to evaluate benefits and costs by taking into consideration return on investment. Research and development costs and expenditures on brands are all recorded in financial statements. The question is how the collective cash inflow can be separated and divided into particular and precise intangibles. A brand charges its customers with premium prices. That price will be higher than the competitors' price. Based on that price, a company's revenue can be attributed to that brand, and the rest remains as research and development revenues.

Stand-alone valuation approach is for all those intangible assets with legally protected ownership and pre-specified stream of benefits. These assets can be valued on a stand-alone basis by easily computing the present value of the expected benefit stream.

Comprehensive Valuation of Enterprise Intangibles is the most sophisticated approach because it will place a combined value on all different company intangibles. There is a methodology for such a comprehensive valuation of intangibles (Gu and Lev, 2003). The basis of this study is an economic production function, or to be more precise, total earnings related to the assets of a company. All assets are divided into three groups of assets: physical, financial and intangible.

The valuation starts with the calculation of "normalized earning" or total earnings of one company. Then it is mandatory to calculate earnings that come from physical and financial assets based on industry-wide data. The rest of the total earnings belongs to intangible-driven earnings that can be discounted in order to produce the final expected stream of intangibledriven earnings.

Study by Chartered Global Management Accountant (CGMA), (2012) proposed three approaches to valuing intangible assets.

1) Market Approach -takes into consideration market-based transactions of similar intangible assets recently exchanged on the market. Publicly traded information is usually a market capitalization of a company, not particular intangible asset;

2) Income Approach -is applied when an intangible asset produces income or when an asset generates future benefits. This approach converts future benefits to a single, discounted amount as a result of increased turnover or cost savings;

3) Cost Approach -is applied when the cost-based analyses are based on the economic principles to ignore the amount, timing, duration of future economic benefits, and also to avoid performance risk in the competitive environment. Historical cost should be used in order to estimate the real value of a developed asset.

Production of one intangible asset is composed of immaterial resources and components. All these immaterial resources produce internally developed or acquired intangible assets. In order to follow up their efficient performance much more precisely, the increasing efforts appeared to develop suitable measurement tools. Two main measurement tools distinguish themselves (Arrighetti, Landini, and Lasagni, 2014). The first one is based on the estimation of expenditures or investments in intangibles, such as research and development expenses, training costs, innovation expenses [START_REF] Corrado | Measuring Capital and Technology: An Expanded Framework[END_REF]. The second one directly links stock values to a particular intangible from the balance sheet and income statement [START_REF] Marrocu | Intangible Capital and Firms' Productivity[END_REF].

Investing in Intangible Assets

Leonardo Nakamura stated that investments in intangible assets in the corporate sector in 2000

were in the amount of $1 trillion. Half of this amount was used for the research and development and software development. The other part was in other intangibles, such as brands, human resources and organizational processes [START_REF] Holtham | Measurement and Reporting of Intangibles -a European Policy Perspective[END_REF].

Literary interest in investments in intangible assets has shown an upward trend so far. It is widely accepted that intangible assets are a crucial part of achieving competitive advantage.

( [START_REF] Barney | Firm Resources and Sustained Competitive Advantage[END_REF] Just a few studies have explored the factors that lead companies to invest in intangibles. In most studies, intangibles have been used as given and already determined, not as explanatory variables. Determining what stimulates companies to invest in intangible assets can be of high importance for both managers and decision-makers, mainly because this can help identify variables that differentiate high from low performing companies. Based on the study produced by [START_REF] Arrighetti | Intangible Assets and Firm Heterogeneity: Evidence from Italy[END_REF], there are three confirmed factors that intensify investments in intangible assets and those are:

• Size of a company -Size of a company is a very important factor for investing in intangibles. Regardless of the industry a company belongs to, it is much easier for large companies to exploit economies of scale in intangible asset accumulation than it is for the smaller ones [START_REF] Dierickx | Asset Stock Accumulation and the Sustainability of Competitive Advantage: Reply[END_REF]. Larger companies can protect their intangibles more successfully than smaller companies, which can motivate them more to invest and develop new ones. Also, a large share of investment uncertainty is related to smaller companies rather than to larger companies [START_REF] Ghosal | The Differential Impact of Uncertainty on Investment in Small and Large Businesses[END_REF];

• Human capital -Several studies confirmed that human capital affects a proportion of amount of investments in intangible assets [START_REF] Abramovitz | American Macroeconomic Growth in the Era of Knowledge-Based Progress: The Long-Run Perspective, S.L. in An Economic History of the United States: The Twentieth Century[END_REF]Galor and Moav, 2004). Human capital is the formal education that every employee has and brings to the company before hiring. Human capital consists not only of formal education, but also of all skills and techniques that an employee possesses [START_REF] Barney | Firm Resources and Sustained Competitive Advantage[END_REF][START_REF] Nerdrum | Intellectual Capital: A Human Capital Perspective[END_REF]. Human capital is composed of all the abilities of an individual that will come in the organization, but will never belong to the organization [START_REF] Bontis | Intellectual Capital ROI: A Causal Map of Human Capital Antecedents and Consequents[END_REF].

• Past level of intangible capital intensity -the organizational complexity is another factor that can affect the process of intangible assets accumulation. The stock of intangible assets directly influences the increase of organizational capital [START_REF] Bontis | Assessing Knowledge Assets: A Review of the Models Used to Measure Intellectual Capital[END_REF]Kaplan and Norton, 2004;Lev and Radhakrishnan, 2003).

Intangible assets are inert themselves, they do not generate profits or create value. Investing in training will only lower costs and increase revenues. But, it is possible to have a much more comprehensive result when such improved processes and efficient information systems are combined with other factors. Without these tools, the value of intangibles disappears much quicker than the value of physical assets. With proper information systems and organizational structure, it is possible to transform tangible and intangible assets into bundles of assets that will further realize sustainable competitive advantage and profitability (Lev, 2002). [START_REF] Nakamura | What is the US gross investment in intangibles? (At Least) one trillion dollars a year![END_REF] uses three approaches in estimating the corporate sectors' investments in intangible assets:

• First approach is based on investments in research and development (R&D), software, brand development and other intangibles;

• Second approach is focused on salaries and wages paid to "creative workers", who generate company's intangible assets;

• Third approach examines the changes in operating margins of companies. The company's operating margin is the difference between sales and cost of sales.

Investing in intangible assets is in itself a little risky. For instance, when a company invests in employees and their trainings or education, another company very often benefits from it when employees change employers. The knowledge, skills, techniques of an employee stay personal even though this employee has changed the company. The company that invests in an employee cannot limit benefits of other future employers (Benkraiem, 2008). That is because companies do not have the means to keep and hold their skills or knowledge. Even in the case of patented inventions, there is a substantial benefit for non-owners which is called "spillovers" (Lev, 2001).

Concept of Intellectual Capital

The concept of intellectual capital was revealed for the first time in 1969 by Kenneth Galbraith.

Kenneth Galbraith wrote a letter to the economist, Michael Kalecki, where he stated that "I wonder if you realize how much those of us the world around have owed to the intellectual capital you have provided over these past decades" [START_REF] Hudson | Intellectual Capital: How to Build It, Enhance It, Use It[END_REF]. Stewart (2001) claimed that the first use of the term 'intellectual capital' dates back to 1959, when he started his study with Itami, who later published the book: "Mobilizing Invisible Assets" in Japan in 1980 (look at newer edition Itami and Roehl, (2009)).

Intellectual capital has been interesting since the Fortune magazine's article of Stewart (1991).

Twentieth century is a century of ideas, knowledge, innovations, information and changes.

Industries that provide services expanded radically. Simultaneously, the financial market became influential in the global market, so "intellectual capital" obtained a very important role for itself. Market value of a company is composed of total book value, everything that is a company's property and intellectual capital [START_REF] Pike | Intellectual Capital Management and Disclosure[END_REF]. Cifuentes (2002) thinks that the adjective "intellectual" eliminates the monetary component of capital, focusing much more on the intelligence in the process of producing products and services. Roos et al. (1997) conceptualized intellectual capital in two different streams -the strategic and measurement stream (Figure 3). The strategic stream is focused on the use of knowledge, interaction between knowledge and value creation and value creation process. The measurement stream tends to develop a new information system that measures non-financial performance indicators.

In the last several years, numerous intensive discussions about intellectual capital and its importance have been initiated. Intellectual capital is seen as a crucial factor for organizational survival and existence in the current global business environment. Because of that, more and more companies present it in the annual reports. In order to develop it internally, companies must possess developed capacities among their employees, organizational departments and levels, stakeholders and top management [START_REF] Gogan | A possible approach for generic model concerning intellectual capital evaluation[END_REF].

Definitions and Characteristics of Intellectual Capital

According to Lev and Schwartz (1971), all company's intangibles make up its own intellectual capital. Intellectual capital is everything known by everybody in a company, and it brings a necessary competitive advantage to the company [START_REF] Serenko | Meta-Review of Knowledge Management and Intellectual Capital Literature: Citation Impact and Research Productivity Rankings[END_REF]Stewart, 1991). If a company places importance on intellectual capital, then the company can survive for many years and obtain a competitive advantage and perspective performance. Innovative company's work is described as an individual work that is directed to introducing new and innovative ideas, processes and products [START_REF] Mura | Intellectual Capital and Innovative Work Behaviour: Opening the Black Box[END_REF]. Intellectual capital is in the current center of economic reality and it is produced from knowledge and intelligence, but only when intellectual capital comes to certain financial benefits through precise valuation of intangible assets (Stewart, 2001). Intellectual capital is the difference or a gap between the total market of a company and its total book value [START_REF] Edvinsson | Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower[END_REF]. Unlike physical capital, intellectual capital stimulates growth mainly because the initial cost of creating certain knowledge is not repeated and brings the economies of scale [START_REF] Mignon | Éditorial. Connaissances, capital intellectuel et management de l'innovation[END_REF] Intellectual capital cannot be seen as a static intangible asset, but as an ideological process. It is a kind of dynamic movement from "having" knowledge and skills, to "using" knowledge and skills [START_REF] Chang | Intellectual Capital and Value Creation-Is Innovation Capital a Missing Link?[END_REF]. [START_REF] Hudson | Intellectual Capital: How to Build It, Enhance It, Use It[END_REF] claimed that the main concept of intellectual capital should not be understood only as "intellect as a pure intellect", but rather as "intellect in action". For [START_REF] Dzinkowski | The Measurement and Management of Intellectual Capital: An Introduction[END_REF], the most important company's intangible asset is intellectual capital that will enhance performance and that is defined as company's knowledgebased equity.

A unique and universal definition of intellectual capital has not been formed yet. Since 1990s, there has been a huge number of studies presented and published by different authors trying to define intellectual capital and propose its valuation method. Explored definitions are listed in the table below: [START_REF] Feiwal | The Intellectual Capital of Michael Kalecki: A Study in Economic Theory and Policy[END_REF] Intellectual capital is not only a pure intellect, but also a degree of "intellectual action". [START_REF] Barney | Firm Resources and Sustained Competitive Advantage[END_REF] Intellectual capital is accepted as a corporate strategic asset that generates sustainable competitive advantage and better financial performance. Stewart (1991) Intellectual capital is defined as the sum of everything and everybody in one company. [START_REF] Hall | The Strategic Analysis of Intangible Resources[END_REF] Intellectual capital can be classified as particular "assets"

and "skills".

Organizationa for Economic

Co-operation and Development (OECD) (1999)

Intellectual capital is the economic value of organizational and human capital. [START_REF] Hudson | Intellectual Capital: How to Build It, Enhance It, Use It[END_REF] Intellectual capital is defined as a personal asset of individuals and a combination of education, experience and attitude about life and business at the same time. [START_REF] Edvinsson | Developing a Model for Managing Intellectual Capital[END_REF] Intellectual capital is knowledge that can be converted into value. There are two main directions of intellectual capital implementation in knowledge-intensive companies through organizational culture, processes and structure, and those are: using intellectual capital with maximum efficiency and exploring new and innovative solutions for reducing consumption of a company's resources (W. [START_REF] Wang | Intellectual Capital and Performance in Causal Models: Evidence from the Information Technology Industry in Taiwan[END_REF]. The role of each intangible and economic capacity of a company is in its ability to use these potentials to create future performance. As long as investors from the services industry rely on traditional measures, investors from the most-advanced industries will try to use non-traditional measures [START_REF] Toffler | Puterea În Mişcare[END_REF]. [START_REF] Rastogi | Knowledge Management and Intellectual Capital as a Paradigm of Value Creation[END_REF] agrees with the previous definition and adds that intellectual capital is the ability of a company to use the given opportunities and create a future value [START_REF] Rastogi | Knowledge Management and Intellectual Capital as a Paradigm of Value Creation[END_REF].

But, most of the studies identify the link between intellectual capital and stocks or resources because they are easy to measure and quantify. The most important, but at the same time the most difficult question is: How much was the value transformed from intellectual capital, and where is the focus within the transformation process? Until now, there has been no correlation between how much you know and how good you are at transforming knowledge into something useful [START_REF] Haines | Enterprise-Wide Change: Superior Results through Systems Thinking[END_REF][START_REF] Mellor | Editor's Introduction: Adapting Agile Approaches to Your Project Needs[END_REF].

Based on the definitions, intellectual capital has the following characteristics [START_REF] Lovingsson | Navigating with New Managerial Tools[END_REF]:

• It is invisible;

• It is closely related to employees' knowledge and experience, but also to a company's technologies and customers;

• It proposes much better future opportunities for a company; [START_REF] Dean | Can Ideas Be Capital? Factors of Production in the Postindustrial Economy: A Review and Critique[END_REF] identified the following characteristics of intellectual capital:

-Weightless; [START_REF] Cabrita | Modelling the Creation of Value from Intellectual Capital: A Portuguese Banking Perspective[END_REF] provided three main characteristics of intellectual capital from a strategic point of view that is linked to the ability to create the potential of a company's knowledge base:

1) Intangibility;

2) Potential to create value;

3) Growth effect of collective practice and synergies. [START_REF] Mhedhbi | The Company's Intellectual Capital: Interaction and Value Creation Case of Tunisian Companies[END_REF] stated that the importance of intellectual capital came with the importance of the theory of resources. The theory of resources sees a company as a combination of tangible and intangible assets, and not as products or services oriented to the market. The intellectual

Classifications of Intellectual Capital

Intellectual capital is not one thing: it is composed of many interrelated elements that have been continuously supported and held together as a whole [START_REF] Bukh | Constructing Intellectual Capital Statements[END_REF]. [START_REF] Guthrie | Reflections and Projections: A Decade of Intellectual Capital Accounting Research[END_REF] presented the classification of intellectual capital based on the series of studies which determined the dual approach matter:

1) "Stock Approach" which consists of calculating intellectual capital owned by a company;

2) "Flow Approach" which consists of intellectual capital seen through the performance evaluation Intellectual capital is comprised of human and structural capital [START_REF] Bontis | There's a Price On Your Head: Managing Intellectual Capital Strategically[END_REF]. Human capital entails employees' experience, competences, motivation and commitment and loyalty, and it is the heart of intellectual capital creation process that will be lost if talented employees left the company [START_REF] Bontis | The Knowledge Toolbox[END_REF]. On the other side, the structural capital belongs to companies and includes innovative capital, relations capital and organizational structure [START_REF] Bontis | The Knowledge Toolbox[END_REF]. Recognizing the value of intellectual capital is consistent with the theory of stakeholder that shows that stakeholder relationships include all the forms of relationships of a company with different stakeholders, employees, suppliers, clients and residents of the community (Roos et al., 1997). Roos et al. (1997) defined the structural capital as: "What remains in the company when all employees go home for the night?" Another classification of intellectual capital can be found in: Human Capital, Organizational Capital and Customers Capital [START_REF] Brooking | Intellectual Capital[END_REF]. [START_REF] Edvinsson | Developing a Model for Managing Intellectual Capital[END_REF] proposed two main components of intellectual capital: human resources and intellectual assets. [START_REF] Edvinsson | Developing a Model for Managing Intellectual Capital[END_REF] From the Figure 5 above, there are two main components of intellectual capital and those are: human resources and intellectual assets. Human resources are all capabilities, collective experience, skills and general know-how of employees used to solve problems. These resources can generate future value for a company. It would be difficult to generate value for a company without employees. Intellectual assets represent a codified, tangible and physical type of knowledge. This type of knowledge can be defined and codified by noting it into a computer as an intellectual asset with a legal protection. Intellectual assets are the source of innovations that companies can commercialize [START_REF] Edvinsson | Developing a Model for Managing Intellectual Capital[END_REF]. In the Figure 6 below, there are all different types of intellectual assets.

Human Resources

Intellectual Assets

Commercializable Assets

• Products [START_REF] Edvinsson | Developing a Model for Managing Intellectual Capital[END_REF] The competitive advantage of a company lies in the complexity of these types of intellectual capital. Success of a company depends on the strategic management of the selected components of intellectual capital [START_REF] Bayburina | Design of Sustainable Development: Intellectual Value of Large BRIC Companies and Factors of Their Growth[END_REF].

• Processes • Services Customer-Related Assets • Relationships • Agreements • History Structure-Related Assets • Plans • Procedures • Processes Figure 6: Intellectual Assets Focus Areas
According to a synthesis from extant literature, intellectual capital is classified into three components (Bassi and Laurie,1997;[START_REF] Cascio | The Future World of Work: Implications for Human Resource Costing and Accounting[END_REF][START_REF] Edvinsson | Intellectual Capital of Nations for Future Wealth Creation[END_REF][START_REF] Edvinsson | Developing a Model for Managing Intellectual Capital[END_REF][START_REF] Marr | Defining Intellectual Capital: A Three-dimensional Approach[END_REF][START_REF] Martínez-Torres | A Procedure to Design a Structural and Measurement Model of Intellectual Capital: An Exploratory Study[END_REF][START_REF] Bontis | There's a Price On Your Head: Managing Intellectual Capital Strategically[END_REF]Roos and Roos, 1997;[START_REF] Saintonge | Tacit Knowledge: The Key to the Strategic Alignment of Intellectual Capital[END_REF]Stewart, 1995;[START_REF] Subramaniam | The Influence of Intellectual Capital on the Types of Innovative Capabilities[END_REF][START_REF] Sveiby | The Intangible Assets Monitor[END_REF]:

1) Human Capital -Human capital represents employees' knowledge, competencies and education;

2) Customer Capital -Customer capital represents all relations with customers, suppliers, distributors and other stakeholders. Customer capital is a very important type of intellectual capital for every company mainly because a company is not an isolated entity. It is an organization that continuously interacts with its business environment.

Business environment, and its customers and clients represent a source of knowledge regarding advantages or disadvantages of a company's products or services, new ideas, organizational practices, etc.;

3) Structural Capital -Structural capital refers to organizational systems, culture, practices, processes and business routines [START_REF] Marr | Defining Intellectual Capital: A Three-dimensional Approach[END_REF]. Structural capital is an organizational structure value of a company and knowledge that is stored in manuals, products concepts, information systems and organizational value [START_REF] Chatzkel | Intellectual Capital[END_REF]. [START_REF] Garanina | Intangible Assets and Value Creation of a Company: Russian and UK Evidence[END_REF] think that there is a positive interaction between human capital, structural capital and relational capital. The interaction between three main components of intellectual capital, human capital, structural capital and relational capital stimulates value creation in a company [START_REF] Bayburina | Design of Sustainable Development: Intellectual Value of Large BRIC Companies and Factors of Their Growth[END_REF][START_REF] Hermans | Value Creation Potential of Intellectual Capital in Biotechnology -Empirical Evidence from Finland[END_REF]. [START_REF] Bontis | Intellectual Capital and Business Performance in Malaysian Industries[END_REF] expanded the previous classification and added three more intellectual capital components:

1) Human Capital -Human Capital is education, people's experience and attitude of employees [START_REF] Hashim | Effect of Intellectual Capital on Organizational Performance[END_REF]. Human can be considered as a very important asset of a company [START_REF] Khan | Human Resource Management: An Islamic Perspective[END_REF]. Human capital represents employees skills, knowledge and experience that is shared with their company in order to add value [START_REF] Baron | Measuring Human Capital[END_REF];

2) Customer Capital -Customer Capital is also known as Relational Capital or External

Capital and it consists of the relationships with customers and suppliers, the government or related industrial associations, brand names, trademarks and reputations [START_REF] Hashim | Effect of Intellectual Capital on Organizational Performance[END_REF]. According to [START_REF] Akpinar | Intellectual Capital[END_REF], customer capital is an organization's relationship and network that are associated with loyalty to the company;

3) Structural Capital -Structural Capital is composed of concepts, models, patents, computers, and systems developed by employees, owned by a company [START_REF] Akpinar | Intellectual Capital[END_REF]. A company exists because of the combination of employees and internal structure and organization [START_REF] Hashim | Effect of Intellectual Capital on Organizational Performance[END_REF]. Good company's structure coupled with skilled employees can provide efficient and quality service as well as improvement in company performance [START_REF] Amrizah | The Relationship between Human Resource Management and Islamic Microfinance Providers Performance: The Mediating Role of Human Capital[END_REF]; 4) Social Capital -Social Capital refers to institutions, relationships and norms that shape the quality and quantity of a company's relations among people and contribute to the economic society [START_REF] Grootaert | Understanding and Measuring Social Capital: A Synthesis of Findings and Recommendations from the Social Capital Initiative[END_REF]. According to [START_REF] Hassan | The Challenge in Poverty Alleviation: Role of Islamic Microfinance and Social Capital[END_REF], social capital has a very important role in managing limitations of financial, human and natural capital. Social capital can be a set of horizontal links between employees, together with social networks and associated norms that will affect company's productivity [START_REF] Hashim | Effect of Intellectual Capital on Organizational Performance[END_REF]; 5) Technological Capital -Technological capital is composed of informational technology (IT), research and development (R&D) and innovations [START_REF] Hashim | Effect of Intellectual Capital on Organizational Performance[END_REF]. According to the study by [START_REF] Lu | Capability and Efficiency of Intellectual Capital: The Case of Fabless Companies in Taiwan[END_REF], there is a strong link between innovation and IT and company performance; 6) Spiritual Capital -Spiritual Capital represents the effects of spiritual and religious practices, beliefs and institutions that have a measurable impact on people, communities and societies [START_REF] Urban | Spiritual capital, academic capital and the politics of scholarship: A response to Bradford Verter[END_REF]. [START_REF] Marques | Spiritual Performance from an Organizational Perspective: The Starbucks Way[END_REF] found that spiritual behavior improves company performance and advantages for multiple stakeholders.

This study determines the association among all these six types of intellectual capital and company performance (Bontis, Chua Chong Keow, and Richardson, 2000). [START_REF] Youndt | Intellectual Capital Profiles: An Examination of Investments and Returns: Intellectual Capital Profiles[END_REF] state that all intellectual capital components should be treated at once and all together because forgetting one them will result in losing sight of the whole, intellectual capital.

Human Capital (HC)

Different studies proved that human capital (HC) is the most valuable asset of a company [START_REF] Backhuis | Reporting on Intangible Assets[END_REF][START_REF] Johanson | Human Resource Costing and Accounting versus the Balanced Scorecard: A Literature Survey of Experiences with the Concept[END_REF][START_REF] Miller | Measuring and reporting intellectual capital from a diverse Canadian Industry perspective: Experiences, Issues and Prospects[END_REF]. The money spent on human resources has been traditionally seen as a cost rather than as an investment with potential future benefit expectations [START_REF] Johanson | Human Resource Costing and Accounting versus the Balanced Scorecard: A Literature Survey of Experiences with the Concept[END_REF][START_REF] Roselender | Accounting for the Worth of Employees: Is the Discipline Finally Ready to Respond to the Challenge?[END_REF]. [START_REF] Baldwin | Business Strategies in More-and Less-Innovative Firms in Canada[END_REF] found that when more innovative and successful companies offer more formal and informal continuous trainings and educations for their employees this results in comprehensive competitive advantage. This is also the case even when a company relies intensively on knowledge and skills of its employees to generate better earnings and productivity [START_REF] Westphalen | Reporting on Human Capital: Objectives and Trends[END_REF]. Better understanding of importance of human capital may lead to gaining substantial benefits [START_REF] Sackman | Human Resource Accounting: A Stateof-the-Art Review[END_REF]. Human capital is the main type of intellectual capital that positively influences financial company performance. The information about importance of human capital within a company might allow for human resources to be more effectively allocated, which would then enable the identification of gaps in skills and abilities of employees. This sense gives much better image to current and potential investors [START_REF] Lank | Leveraging Invisible Assets: The Human Factor[END_REF].

Improved ways of measuring and reporting human resources motivates decision-makers within a company to invest more in education and trainings [START_REF] Boudreau | Measuring Intellectual Capital: Learning from Financial History[END_REF][START_REF] Johanson | Human Resource Costing and Accounting versus the Balanced Scorecard: A Literature Survey of Experiences with the Concept[END_REF][START_REF] Olsson | The Construction of Transparency through Accounting on Intellectual Capital (IC)?[END_REF]. Human capital makes reference to tacit and explicit knowledge that all employees possess and that can generate a future value (Martín- [START_REF] Martín-De-Castro | Towards 'An Intellectual Capital-Based View of the Firm': Origins and Nature[END_REF].

Human Capital (HC) comprises skills, education, competences, experience and intellectual abilities of employees [START_REF] Brooking | Intellectual Capital[END_REF][START_REF] Edvinsson | Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower[END_REF]Roos and Roos, 1997;Stewart, 2001;[START_REF] Sullivan | Value-Driven Intellectual Capital: How to Convert Intangible Corporate Assets into Market Value[END_REF]. [START_REF] Hsu | Intellectual Capital and New Product Development Performance: The Mediating Role of Organizational Learning Capability[END_REF] stated that human capital contains all business capital that lies in employees and that is not owned by a company. This capital can be taken out of a company and it includes employees' and managers' competences, skills, knowledge, attitudes, wisdom and commitment.

Based on the work of [START_REF] Ulrich | Intellectual Capital = Competence x Commitment[END_REF], intellectual capital is seen as the commitment and competence of workers. This work puts an emphasis on the following questions: How do employees think? How do they work? How does a company develop policies and systems to organize and finish the work? These questions have been critical because of the next six reasons:

1) Intellectual capital is the only company's appreciable asset. All other assets are depreciable since the moment they are acquired. The responsibility of the management is to make knowledge productive, and to transform intellectual capital into a customer value;

2) Knowledge work increases, it does not decrease because relationships come from workers' competences and commitments; Investments in intellectual capital are misdirected. [START_REF] Ab | Statement of Human Resources, 1994[END_REF] shows how Swedish National Telecommunication Company (Telia) practically applied intellectual capital in order to improve human capital category in Sweden. Since 1990, Telia has published the human capital statement of resources with many key ratios and indicators. Some of the indicators were numbers of employees, personnel mobility, industrial injuries, and remuneration. Also, Telia published the human resource balance sheet and human resource income statement [START_REF] Ab | Statement of Human Resources, 1994[END_REF].

Companies do not tend to publish or present their indicators of human capital externally because of a high risk of losing talented employees to competitors [START_REF] Miller | Measuring and reporting intellectual capital from a diverse Canadian Industry perspective: Experiences, Issues and Prospects[END_REF]. Managers in companies are more focused on usefulness of human and customer (relational) capital, than structural (organizational) capital indicators [START_REF] Miller | Measuring and reporting intellectual capital from a diverse Canadian Industry perspective: Experiences, Issues and Prospects[END_REF]. Based on the work of Martínde-Castro et al. ( 2011) human capital has its three dimensions, together with included variables:

1) Knowledge -Includes the following variables: formal education, specific training, experience and personal development;

2) Abilities -Include type of knowledge related to know-how: individual learning, collaboration-team work, communication and leadership;

3) Behavior -Includes knowledge that leads individuals to do their tasks: having a sense of belonging and commitment, self-motivation, job-satisfaction, friendships, flexibility and creativity.

Through education and training, professionals can understand how people can learn, share their knowledge and work together in different working environments. At the same time, professionals can understand how organizational culture can influence learning initiatives [START_REF] Bassi | Harnessing the Power of Intellectual Capital[END_REF]. Learning will be realized through the intensive use of advanced technologies that will help in the work. Learning will be a basic workplace skill [START_REF] Plott | Preparing for 2020[END_REF]. [START_REF] Bessieux-Ollier | Le Capital Humain : Approche Comptable versus Approche Managériale[END_REF] emphasized that even though the data on the Human capital are published in the annual reports of companies, in the part of historical costs, they do not provide a more realistic image of the company, in particular of value creating elements on the longterm. Also, due to the fact that accounting recognition of intellectual capital is missing, there are difficulties to implement different managerial tools for measuring, describing and presenting intangibles.

Structural Capital (SC)

Structural Capital (SC) refers to the value of what is left when all company's employees go home [START_REF] Skandia | Customer Value[END_REF]. Structural Capital consists of processes, systems, structures, brands, intellectual property and other intangibles owned by a company that do not appear in the company's balance sheet [START_REF] Brooking | Intellectual Capital[END_REF][START_REF] Edvinsson | Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower[END_REF]Roos and Roos, 1997;Stewart, 2001).

According to [START_REF] Bontis | Intellectual Capital and Business Performance in Malaysian Industries[END_REF] structural capital represents all databases, organizational charts, process manuals, strategies, routines and all non-human storehouses of knowledge within a company. Human capital and structural capital together are the main company's indicators for future value creation and better financial results generation.

Structural capital is a company's abilities to meet all market demands. It involves a company's structures and organizational levels that enable employees to demonstrate stable intellectual performance. One employee can possess a high level of intellect, but if a company does not have developed systems and procedures, the overall intellectual capital will not come up to the highest extents [START_REF] Bontis | There's a Price On Your Head: Managing Intellectual Capital Strategically[END_REF].

develops new sophisticated processes and other internal initiatives, structural capital improves [START_REF] Knight | Performance Measures For Increasing Intellectual Capital[END_REF].

Based on the work of Martín- [START_REF] Martín-De-Castro | Towards 'An Intellectual Capital-Based View of the Firm': Origins and Nature[END_REF], structural capital has its two dimensions, together with variables included:

1) Technological capital -Includes the following variables: efforts in research and development, technological infrastructure including the purchase of advanced technology and intellectual and industry property;

2) Organizational capital -Includes the following indicators: organizational culture, values and attitude, information and telecommunications capabilities and organizational structure;

Customer (Relational) Capital

Customer (Relational) capital represents all connections with internal and external stakeholders [START_REF] Roos | Intellectual Capital: Navigating the New Business Landscape[END_REF] [START_REF] Bontis | There's a Price On Your Head: Managing Intellectual Capital Strategically[END_REF].

Customer capital has its own five components [START_REF] Knight | Performance Measures For Increasing Intellectual Capital[END_REF]:

1) Supplier capital;
2) Alliance capital;

3) Community capital; 4) Regulatory capital; 5) Competitor capital. Finally, the competitor capital presupposes critical understanding and intelligence of competitors [START_REF] Knight | Performance Measures For Increasing Intellectual Capital[END_REF].

Customer capital is one of the most important capitals among intellectual capital factors. The importance of customer capital can be monitored easily through financial indicators (T. A. [START_REF] Stewart | Intellectual Capital: The New Wealth of Organizations[END_REF]. [START_REF] Norton | The Balanced Scorecard -Measures That Drive Performance[END_REF] (Lord Kelvin, 1883, pages 80 and 81)."

In order to measure and quantify intellectual capital, it is necessary to respect several principles [START_REF] Stewart | Intellectual Capital: The New Wealth of Organizations[END_REF]):

• Companies should promote teamwork, develop network and communities of practice if they want to create and develop their own intellectual capital;

• Companies should find talented employees, motivate them, invest in them and propose the measures for their preservation if they want to create wealth;

• Structural capital should be used to develop those intangible assets that will result in realizing competitive advantage;

• Companies must change the way of collecting future and potential knowledge;

• Companies must pay attention to using collected knowledge;

• Companies must allow natural flow of information through departments and teams; [START_REF] Kontic | A Strategic Model for Measuring Intellectual Capital in Serbian Industrial Enterprise[END_REF] argue that "the best to measure the intellectual capital is just to consider all risks of not measuring it". Labor shortages, low productivity, skills mismatches or talents going to competitors are some of the few consequences of not evaluating intellectual capital within a company.

•

The key reasons why intellectual capital should be measured are as follows [START_REF] Marr | Why Do Firms Measure Their Intellectual Capital?[END_REF]:

• To help companies to define their main strategy;

• To evaluate success of strategy execution;

• To assist in the company's diversification and expansion decisions;

• To use it as future basis of management compensation;

• To communicate with company's external shareholders. [START_REF] Holmen | Intellectual Capital Reporting[END_REF] presented his five key reasons for measuring intellectual capital:

1) Help organizations to formulate business strategy;

2) Lead development of main performance indicators;

3) Help in acquisitions and mergers;

4) Link to higher salaries and wages; • Technology Broker;

• Citation-Weighted Patents;

• Value Explorer;

• Intellectual Asset Valuation;

• Total Value Creation; II) Market Capitalization Methods (MCM) -calculate the intellectual capital value by differentiating between a company's total market value and its stockholders' equity.

In this group, there are:

• Tobin's Q Ratio;
• Market to Book value;

• Investor Assigned Market Value;

III)

Return on Assets Methods (ROA) -estimate a company's ROA that is compared based on the industry's average. In this group, there are:

• Economic Value Added (EVA™);

• Market Value Added (MVA™);

• Value Added Intellectual Coefficient (VAIC™);

• Human Resource Accounting (HRA);

• Calculated Intangible Value (CIV);

• Knowledge Capital Earnings (KCE);

IV) Scorecard Methods (SC) -identify various indicators of intellectual capital components that are generated in scorecards or graphs. In this group, there are:

• Balanced Scorecard;

• Intellectual Capital index;

• Intangible Assets Monitor;

• Skandia Navigator;

• "Tableau de Bord";

• Knowledge Assets Map Regarding Direct Intellectual capital methods (DIC) which represent a monetary type, the main strength is related to allowing the measurement of intellectual capital and providing a more comprehensive picture of a company's intellectual wealth. The main weakness of this method is that it is not possible to use it for benchmarking or comparison with other competitors and companies. Regarding Market capitalization method (MCM) which is a monetary method in general, the main strengths are allowing comparison with other companies and allowing benchmarking that was not possible with the previous group of methods. Regarding the Return on assets method (ROA) which is a monetary group of methods, the major strength is that these methods are suitable for comparing different companies in the same sector of activities. On the other side, the main weakness is characterized by the lack of information constituting intellectual capital. The final group of methods is scorecard method, which is a non-monetary type of measuring intellectual capital. The main strength is that it provides a comprehensive examination of intellectual capital and its final performance. The biggest weakness is that it is highly sensitive to the changes of the context (Gogan 2014).

As presented above, each method has its own strengths and weaknesses, so it is very hard to distinguish one from the other mainly because they overlap [START_REF] Jurczak | Intellectual Capital Measurement Methods[END_REF]Lev and Zambon, 2003;[START_REF] Mouritsen | Intellectual Capital and the Capital Market: The Circulability of Intellectual Capital[END_REF].

Companies try to rely more on non-financial measures that are focused on reputation, knowhow, knowledge, information technology, corporate culture, and databases [START_REF] Stivers | Harnessing Corporate IQ[END_REF]. Measuring non-financial indicators can be seen more as an art, rather than as a science, because the produced results can affect performance substantially [START_REF] Roos | Intellectual Capital: Navigating the New Business Landscape[END_REF]. The measurement of intellectual capital is very important because senior executives manage what has been measured (Roos and Roos, 1997) and company becomes what can be measured after some time [START_REF] Hauser | Metrics: You Are What You Measure![END_REF].

Based on the work of [START_REF] Abeysekera | Intellectual Accounting Scorecard -Measuring and Reporting Intellectual Capital[END_REF], non-financial indicators have several limitations:

• First, non-financial indicators models are independent of organizational level indicators;

• Second, non-financial indicators are independent of the traditional accounting system except in Intangible Assets Monitor;

• Third, non-financial indicators should be directly or indirectly linked to the fair value of a company.

Direct Intellectual Capital Methods (DIC)

The first group of intellectual capital measurement methods are Direct Intellectual Capital Methods (DIC). They are characteristic because they estimate the value of particular intangible asset components in money. After identifying all the components of intangible assets, it is necessary to calculate the aggregate or total value of components that present the total value of intangible assets of a company. Direct methods are very useful mainly because they show the total image or feasibility of intangibles of a company, or of organizational levels within a company [START_REF] Roos | Managing Intellectual Capital in Practice[END_REF].

indicators of total intangible asset value size. Gordon Petrash, a former director of the intangible asset management system proposed the following five steps; 1 1) Defining the role of knowledge in a company;

2) Analyzing competitors' strategy and intangible resources;

3) Classifying intangible resources of a company; 4) Estimating the value of intangible resources that are prepared for further storage, development, sales or excluding;

5) Forming new knowledge portfolio and repeating the whole process.

Citation-Weighted Patent method can be seen as one of the most transparent methods mainly because it is very easy for understanding and following. The development process is highly difficult, but visible and transparent. The development of one patent based on this method entails following research and development costs, potential market value and certain individual legal rights and potential benefits. Following only traditional accounting is not sufficient because it will be used only in situations when one patent should be sold/bought at which point it is necessary to estimate the historic cost. Dow Chemical published the report of intangible assets, together with other official financial statements in 1996 for the first time [START_REF] Bontis | Assessing Knowledge Assets: A Review of the Models Used to Measure Intellectual Capital[END_REF].

Value Explorer

Value Explorer method was developed by the Knowledge Advisory Services department of KPMG Netherlands [START_REF] Andriesson | Implementing the KPMG Value Explorer: Critical Success Factors for Applying IC Measurement Tools[END_REF]. The Knowledge Advisory Services department was focused on: formulating strategy based on knowledge, improving exchange of knowledge and measuring and reporting about intangible assets. This method was based on emphasizing core competencies or identifying the strategically most important intangible assets. This method was based on the following five steps:

1) Identifying company's intangible assets on key competencies;

2) Estimating value by analyzing characteristics of key competencies through added value, competition, potential, sustainability and robustness;

1 The institution that provides information about the number of citations per patent is Loet Leydesforff - 3) Financial estimation of intangible assets by allocation of expected future benefits; 4) Developing managerial plan based on the previous phase by providing the management with suggestions which relate to the best way of adding intangible asset value; 5) Management reporting the value dashboard together.

Intellectual Asset Valuation

The Intellectual Asset Valuation method was developed by [START_REF] Sullivan | Value-Driven Intellectual Capital: How to Convert Intangible Corporate Assets into Market Value[END_REF]. The basis of this method is measuring the total market value of a company which is further used to calculate the total intangible asset values. The calculation of the total intangible asset values is based on the principle going concern. Total market value of a company or market capitalization is the value that shows the market value of a company and potential value of that company's assets. Total market value is a sum of total book value and discounted cash inflows activities. If total market values are presented from the intangible asset perspective, then a total market value is a sum of structural capital and intellectual capital. If we compare these two formulas than an intellectual capital value is equal to the discounted cash inflow activities [START_REF] Sullivan | Value-Driven Intellectual Capital: How to Convert Intangible Corporate Assets into Market Value[END_REF].

Total Value Creation

The Total Value Creation method was developed by the Canadian Institute of Chartered Accountants (CICA), Anderson and McLean. This method is based on discounting cash inflows of events, not business transactions. This was a huge change because most of the calculations considered business transactions as discount value. This method has four main elements [START_REF] Andersen | Accounting for the Creation of Value[END_REF]:

1) Strategy for developing and realizing a company's value;

2) Discounting cash flows based on future value events;

3) Report about a company's capacity to generate future values;

4) Report focused on the owners of capital that is presented in financial and non-financial measurements;

Market Capitalization Methods (MCM)

Market Capitalization Methods (MCM) are based on the financial information of a company.

Financial statements present a clear value of tangible assets, such as equipment, buildings, cash or stocks. The attention is not so much paid to intangible assets, such as brand, marketing campaigns or patents. These methods start from the basic formula of calculating the total value of a company:

Total Book Value = Total Obligations + Total Equity Total Equity = Total Book Value -Total Obligations By the unwritten rule, the Total Book Value is never completely equal to the Total Equity, and there are usually some company's obligations. On the other side, the Total Market Value of a company is also a very important indicator that shows how investors see the company and how much they trust their investments.

Tobin's Q ratio Tobin's Q ratio was developed by James Tobin. This ratio is comparison between total market value of a company and its cost of replacement. If the coefficient is greater than 1, than it is a good sign that shows that investors will invest in the company with a value greater than its cost of replacement. On the other side, if the coefficient is smaller than 1, than it is not a good signal for investors. This ratio is used for intangible assets analysis which shows that if a q coefficient is getting higher, than it is a signal that a company is investing more and more in technology or human capital. This ratio shows us why intangible assets are so important. To obtain machines, tools or techniques is not so difficult nowadays. Nearly all competitive companies possess almost the same or very similar tangible assets, but what differs them from each other are intangible assets. Intangible assets will generate future higher or lower benefits to a company that is called the Tobin's Q ratio. This ratio is very useful in comparison to companies from the same industry, eliminating different methods of amortization of tangible assets [START_REF] Stewart | Intellectual Capital: The New Wealth of Organizations[END_REF]. The formula of the Tobin's Q ratio looks like this:

not possible to calculate a particular intangible value. There can only be a discussion about the effects of intangible assets that have an indirect influence because a direct relation cannot be identified.

Return on Assets Methods (ROA)

The Return on Assets Methods is characterized by utilizing financial information from financial statements. They are very easy for calculation because financial information is mostly available.

They are very often used in acquisition and merger processes as indicators of success or comparison of performance of intangible assets that are a subject of transactions.

Economic Value Added (EVA)™ Economic Value Added method is calculated as a difference between net income and costs of capital. EVA™ method can be calculated for each business entity of the large corporation as well as for the whole company without a problem,. [START_REF] Modigliani | The Cost of Capital, Corporation Finance and the Theory of Investment[END_REF]. MVA™ is a result of present and planned projects of a company, or to be more precise, it shows the way the market values the performance of a company, as a set of projects. If it is necessary to analyze value created on the level of particular, individual business units, then it is important to calculate EVA™ and it should achieve value higher than expected [START_REF] Bontis | The Knowledge Toolbox[END_REF].

Stern

Value Added Intellectual Coefficient (VAIC™)

Value Added Intellectual Coefficient (VAIC™) is a method developed by [START_REF] Pulic | VAIC TM an Accounting Tool for IC Management[END_REF]. This method calculates intellectual capital based on the accounting information that is possible to be found in financial statements. This method provides the value creation efficiency and produces added value to the company based on intellectual capital or intellectual resources [START_REF] Ståhle | Value Added Intellectual Coefficient (VAIC): A Critical Analysis[END_REF].

• Gan, 2008). VAIC™ is an easy method for calculations.

It is standardized and very consistent, and enables effective comparative analyses across different companies and countries [START_REF] Firer | Intellectual Capital and Traditional Measures of Corporate Performance[END_REF].

Human Resources Accounting (HRA)

Human Resources Accounting method is developed by [START_REF] Flamholtz | A Model for Human Resource Valuation -a Stochastic Process with Service Rewards[END_REF] and it is based on quantification of contribution of human resources in the value creation process of a company.

Human resources are seen as a part of a company's assets. Human Resources Accounting model is first of all a tool. The biggest advantage of this approach is the increase in the quality of management of human resources based on certain quantitative and qualitative measurements [START_REF] Flamholtz | Human Resource Accounting: A Historical Perspective and Future Implications[END_REF]. [START_REF] Flamholtz | A Model for Human Resource Valuation -a Stochastic Process with Service Rewards[END_REF] proposed three steps for defining the value of an employee by estimating present value of future benefits based on his/her expected work in a company:

The first step is estimating the expected period of working of a single employee in a company that depends on several factors, such as: expected length of life of an employee, employee's health, pension policy and employee's mobility;

The second step is the identification of monetary or financial equivalent of expected services of an employee. This measurement is calculated based on the estimation of absolute value of provided services in the future, and relative contribution of performance improvement of a company;

The third step is discounting identified value of the second step which results in the present value. If a company wants to know value of an employee, it is necessary to calculate the starting, basic value. [START_REF] Flamholtz | A Model for Human Resource Valuation -a Stochastic Process with Service Rewards[END_REF] suggested here: historic cost, costs of replacement, measurement of performance or costs of salaries.

Calculated Intangible Value (CIV)

Calculated Intangible Value (CIV) method was developed by [START_REF] Stewart | Intellectual Capital: The New Wealth of Organizations[END_REF]. This method estimates the value of intangible assets that will interest owners of capital to invest in a company that is focused on knowledge creation. Based on the same study, the hypothesis is that a company will achieve only limited performance if it depends only on material or tangible assets.

This method has three main steps:

The first step is calculating the income of total assets, as a relation between average value of net income before taxation and total assets of a company;

The second step is comparing income of total assets value with the average income of total assets of the industry where a company belongs;

The third step is comparing the value from the second step with the Weighted Average Cost of Capital (WACC).

This method has not been used very often until now. There are only a few empirical studies tested that used Calculated Intangible Value (CIV) method as a method for calculating, following and analyzing the total intangible assets of a company [START_REF] Kujansivu | Investigating the Value and Efficiency of Intellectual Capital[END_REF].

Knowledge Capital Earnings (KCE)

Knowledge Capital Earnings (KCE) method was developed by Lev (2001). This method starts with estimating average expected annual income of a company. The method suggests including last three financial years. When the value of expected annual income is calculated, then the income from intellectual capital is based on the principle of remaining value -residual calculation. Based on the Knowledge Capital Earnings method, average expected incomes for all companies, beside industry or level of risks, are 7 % for tangible assets and 4,5 % for financial assets.

The next step is calculating the expected income from intangible assets only. However, this income is developed from tangible and financial assets. The value that remains after subtracting the total estimated expected income of the whole company from the expected incomes from tangible and financial assets is the expected income from intangible assets only. It is problematic to find the precise average level of income for intangible assets because it is highly dynamic and unstable (Lev, 2001).

Scorecard Methods (SC)

Scorecard methods are methods based on the identification of financial and non-financial indicators. These methods take into consideration different elements of intangible assets or intellectual capital in their report as a graph [START_REF] Morady | Intellectual Capital Measuring Methods[END_REF]. There are many similarities with the direct intellectual capital methods, and their only difference is in the inability to produce final results in monetary values. These methods just present values and indicators as they are.

This is one of the biggest disadvantage of these method [START_REF] Jurczak | Intellectual Capital Measurement Methods[END_REF][START_REF] Roos | Managing Intellectual Capital in Practice[END_REF].

Balanced Scorecard

The Balanced Scorecard was developed by Kaplan andNorton (1992, 1996). Through the study financed by the Harvard Business School, Harvard and Kaplan developed the measurement method called "Balanced Scorecard". This measurement system is a multi-dimensional system that represents a combination of financial and non-financial factors at the same time. That is why it was named Balanced Scorecard because it has a perfect balance between financial and non-financial indicators. From the development of Balanced Scorecard, until now, its purpose has been changed to a strategy implementation tool. It is composed of a set of different indicators for each of the main four perspectives. The main four perspectives are [START_REF] Jurczak | Intellectual Capital Measurement Methods[END_REF]:

1) Financial measures: how does our financial performance look to our shareholders;

2) Customer measures: how does our pricing compared with the competitors and products ratings look to our customers;

3) Internal process measures: what can a company improve and how can it create value in terms of length of time cycle and waste level;

4) Learning and growth measures: how can a company improve and create value from percentage of sales derived from new products.

Figure 11: Balanced Scorecard concept [START_REF] Norton | The Balanced Scorecard -Measures That Drive Performance[END_REF] Balanced Scorecard allows each company to choose their own indicators that they will use in a particular perspective. This is an essential measurement tool that visualizes an organization's strategy and processes and systems [START_REF] Jurczak | Intellectual Capital Measurement Methods[END_REF]. [START_REF] Kaplan | Transforming the Balanced Scorecard from Performance Measurement to Strategic Management: Part 1[END_REF] emphasized two main reasons why Balanced Scorecard found such a big practical implementation within companies: first, Balanced Scorecard established a clear link between strategy of some non-financial measures and measurement systems; second, Balanced Scorecard welcomed the increasing importance of advanced technology and competitive advantage. According to the literature, it has been proposed that Balanced Scorecard should develop techniques that will provide sustainable intellectual capital [START_REF] Bontis | The Knowledge Toolbox[END_REF][START_REF] Johanson | Mobilizing Change through the Management Control of Intangibles[END_REF]Mouritsen, Thorsgaard Larsen, and Bukh, 2005).

Intellectual Capital Index

After developing the Skandia Navigator by Edvinsson and Malone, the Intellectual Capital Index was formed. As described in the Figure below, the models attempt to explain intangible resources and their flows. The models want to gather all different intellectual capital measures in one single index. In this way, the model will provide much greater picture of a company's intellectual capital because it is not possible. The attempt is just to estimate the most realistic market value [START_REF] Sveiby | The Intangible Assets Monitor[END_REF]. • Growth/Renewal (organic growth, customer profitability etc.)

Visible

• Efficiency (customer satisfaction, customer perceived quality etc.)

• Stability (customer loyalty, customer longevity, repeat orders, etc.)

Figure 13: Intangible Asset Monitor [START_REF] Sveiby | The Intangible Assets Monitor[END_REF] Based on the Figure 13 above, the intangible asset monitor is composed of three main intangible assets, and those are: competence of personnel, internal structure and external structure. All of those three intangible assets are compared with the same indicators' growth or renewal, efficiency and stability [START_REF] Sveiby | The Intangible Assets Monitor[END_REF].

Skandia Navigator

The interest in measuring intellectual capital started from the second half of the twentieth century. Different scientists, researchers and authors tried to find an adequate method, but the problem was in very limited information and resource and in finding the suitable one. The intellectual capital statement appeared in the mid-1980s for the first time, when some professionals in the service industry in Sweden proposed additional statements to the official set of financial statements [START_REF] Bukh | Constructing Intellectual Capital Statements[END_REF]. [START_REF] Sveiby | The Know-How Company[END_REF] created a template for a new annual report for 'know-how' companies. 'Know-how' companies were the companies with highly educated and skillful employees. According to Konrad Group [START_REF] Sveiby | The Invisible Balance Sheeet[END_REF], it was necessary to differentiate between know-how companies and knowledgeintensive companies. [START_REF] Sveiby | The Intangible Assets Monitor[END_REF] generalized his ideas to cover all range of 'knowledge organizations'. Based on the book by [START_REF] Sveiby | The Invisible Balance Sheeet[END_REF] 'the invisible balance sheet' was included in the annual report based on the recommendation from the Swedish Association of Employers in Service Industry in 1993 [START_REF] Tjaknesteforbundet | TjaK nesteforetagens vaK rden, rekommendationer om styrtal i tjaK nestefoK retage[END_REF]. Together with Leif

Edvinsson and some consulting companies, Swedish consulting company SIFO2 , Karl Erik Sveiby was the prime initiator of launching the intellectual capital movement [START_REF] Bukh | Constructing Intellectual Capital Statements[END_REF].

Based on the work of [START_REF] Bukh | Constructing Intellectual Capital Statements[END_REF], the main ideas about the importance of having the intellectual capital statement explored are presented by [START_REF] Bukh | Constructing Intellectual Capital Statements[END_REF]. The study is based on questionnaires developed on a five-point Likert scale together with specific reasons proposed. This questionnaire was completed for the years 1998 and 1999. The results proved that the key reasons were associated with intellectual capital and relations between people, knowledge, organizational routines and inter-organizational relations.

Based on the work of [START_REF] Bukh | Constructing Intellectual Capital Statements[END_REF] According to [START_REF] Bro | Intellectual Capital Report 2001[END_REF], intellectual capital accounts and measurement methods develop intelligent solutions that improve final performance.

Based on the study of Ordoñez de Pablos (2001a[START_REF] Ordoñez De Pablos | Relevant Experiences on Measuring and Reporting Intellectual Capital in European Pioneering Firms[END_REF][START_REF] Ordoñez De Pablos | Intellectual Capital Measuring and Reporting in Leading Firms: Evidences from Asia, Europe and the Middle East[END_REF], there are three major areas of intellectual capital report, and those are: Human capital area, Relational capital area and Structural capital area.

• Human capital area is composed of six basic sections: employee profile, education, training, commitment and motivation, staff turnover and results.

• Structural capital area is divided into six major sections: general infrastructure, knowledge-based infrastructure, innovation, quality and improvement projects, customer support and administrative processes.

• Final area is a relational area and it is composed of four sections: client profile, customers (image and stakeholders), diffusion and networking, and intensity, collaboration and connectivity. Mouritsen and Larsen (2005) proposed the key elements of the intellectual capital statement in the Figure 17 below:

Elements of an intellectual capital statement 1. Knowledge narrative: A narrative about the firm's ambition to create (use) value for its users and the required types of knowledge resources to accomplish this:

• What product or service does the company provide?

• How does it make a difference for the user?

• What knowledge resources are necessary to be able to supply the product or service? • How does the constellation of knowledge resources produce a service/product?

2. Management challenges: The durable challenges posed by the role of knowledge resources in the firm's business model:

• How are the knowledge resources related?

• Which existing knowledge resources should be strengthened?

• What new knowledge resources are needed?

3. Efforts: The initiatives to compose, develop and procure knowledge resources?

• What initiatives, actual and potential, can be identified?

• What initiatives should be given priority?

4. Indicators: The mechanisms of monitoring the portfolio, development and effects of knowledge resources:

• Effects -how do activities work?

• Activities -what does the firm do to upgrade knowledge resources?

• Resource mix -what is the composition of knowledge resources?

Figure 17: Elements of intellectual capital statement (Mouritsen and Larsen, 2005) This statement is composed of four main parts, and those are: knowledge narrative, management challenges, efforts and indicators of success.

Based on the RICARDIS project ( 2006), an initiative to implement an intellectual capital measurement system was proposed in order to standardize the process of creating harmonized Intellectual Capital Statement based on the good practices from Europe, Australia, Denmark, France, Sweden and other countries.

Investments in Intellectual Capital

The OECD Member countries have the rising awareness about the highly important part of their investments in the business sector that is focused on "investment products", such as research and development, software, training, marketing, etc. The financial data still remains very scarce for research and exploration [START_REF] Kaplan | Intangible Investment: An Essay at International Comparison[END_REF]OECD, 1992). In knowledge-based economy, successful innovations demand various kinds of investments in intangibles that will further produce intellectual capital. Intellectual capital is all about future earning potential that will be obtained from investments in different elements of Intellectual Capital and tangible assets at the same time. It is not enough to invest only in R&D and innovations, but also in other forms of intellectual capital (RICARDIS project, 2006).

Investing in intellectual capital is highly important for companies that want to realize their strategies operationally and perform well (Riahi-Belkaoui, 2003a). Companies that are marketdriven require investments in tangible assets (logistics, information systems, distribution, etc.)

and intangible assets (trainings, product development, brand, marketing, etc.) both at the same time [START_REF] Day | The Capabilities of Market-Driven Organizations[END_REF][START_REF] Vorhies | The Capabilities and Performance Advantages of Market-driven Firms[END_REF]. When one company invests in its intellectual capital, the hidden value and invisible results will appear and exceed the cost of saving. The beneficial results will appear in the form of customer satisfaction increase, improvement of internal processes and improved company final performance. What remains hidden are values of human resources, information systems, customer relationships, research and development, creativity and competence basis [START_REF] Chen | Intellectual Capital/Theories and Practices[END_REF].

Investing in knowledge is crucial for their opportunity to create value and create high value products and services [START_REF] Chang | Intellectual Capital and Value Creation-Is Innovation Capital a Missing Link?[END_REF]. [START_REF] Rodriguez-Castellanos | Organisational Knowledge, Intangible Resources And Business Performance[END_REF] proved that companies which invest in intellectual capital have a better economic result than those that do not. For [START_REF] Malone | Which Are the Most Valuable Companies in the New Economy?[END_REF], the biggest challenge for a company is how to convert intangible assets into market value. [START_REF] Edvinsson | The New Knowledge Economics Business[END_REF] thinks that in the knowledge economy, the present value can change and be different from the value of yesterday or tomorrow. For example, companies very often disclose financial information about "innovation revenues" in France.

Those are the revenues that come from the recently introduced and developed products. Such revenues are the proof that French companies have abilities to innovate and very quickly launch products or services on the market. This kind of financial information has been proven to be very valuable for investors to predict the future growth or productivity of companies in the upcoming years (Lev, 2003). The progress of company performance through technical improvements, innovation and quality of human, structural and human capital will stem from investments in knowledge, education, research and development (Seleim, Ashour, and Bontis, 2004).

Investments in intellectual capital very often do not generate immediate results and returns. research proved that a period of 2 years is necessary for investments in R&D to be capitalized [START_REF] Leonard | Research and Development in Industrial Growth[END_REF][START_REF] Hirschey | Amortization Policy for Advertising and Research and Development Expenditures[END_REF] to seven years [START_REF] Ballester | The Economic Value of the R&D Intangible Asset[END_REF][START_REF] Sougiannis | The Accounting Based Valuation of Corporate R&D[END_REF].

Investments in intangibles produce intangible capital, long-lasting rights or assets with or without physical substance that will generate future economic benefits for a company.

Investments are an inflow of financial resources into the stock of intangibles (OECD, 1998).

Definitions of Investments in Intellectual Capital

The investment product has its main ability to make contributions to more than one production cycle. The investment process leads to the accumulation in the form of an asset. Investments in intangibles include current and capital expenses for tangible and intangible products that will remain in use for more than one year (OECD, 1998). The biggest task is the collection and separation of operating costs from capital costs because intangible investments very rarely relate to services [START_REF] Berends-Balast | Lifetime of Capital Goods[END_REF]. In practice, expenses related to intangible products are recorded in company's accounts within non-capital part or operating part (OECD, 1998).

A unique definition of intellectual capital investments has not been found until now because it mainly depends on the purpose of a study. On one side, investments are seen as expenditures for intellectual capital components. On the other side, some researchers see investments in intellectual capital as intangible investments, knowledge based investments, intangible activities, etc. (Lentjushenkova and Lapina, 2014). Many researchers see intellectual capital investments as the key-drivers of financial company performance. The definition of "investments" is not only focused on financial performance, but also on non-financial performance such as productivity, quality and improvement (Lentjushenkova and Lapina, 2014). One investment in a company's intellectual capital is based on the intellectual capital creation [START_REF] Gaponenko | Управление Знаниями[END_REF]. [START_REF] Corrado | Intangible Capital and Economic Growth[END_REF] defined investment as any use of resources that are not used for the current consumption, but that are used to increase and create long-term benefits. Most of the researchers link intellectual capital investments to R&D expenses [START_REF] Bandeira | Value of Intangibles Arising from R&D Activities[END_REF][START_REF] Coombs | Measuring Technological Capability and Performance[END_REF][START_REF] Liebowitz | Developing Knowledge Management Metrics for Measuring Intellectual Capital[END_REF].

Based on the literature, intellectual capital investments are linked to value factors (Chen, Cheng, and Hwang, 2005a;[START_REF] Dumay | Grand Theories as Barriers to Using IC Concepts[END_REF]. [START_REF] Youndt | Intellectual Capital Profiles: An Examination of Investments and Returns: Intellectual Capital Profiles[END_REF] examined investments in intellectual capital components and how those components coexist. To be more precise, the investments were made in Human resource management (HRM), Information technology (IT)

and research and development (R&D). The results of this study were that HRM and IT investments tended to be more important than R&D investments across intellectual capital components [START_REF] Youndt | Intellectual Capital Profiles: An Examination of Investments and Returns: Intellectual Capital Profiles[END_REF]. Lentjushenkova and Lapina (2014) found that the concept of intellectual capital can be divided into four main steps:

1) Changing from the "resource-based" to "knowledge-based" view;

2) Developing and determining the components of intellectual capital;

3) Identifying the creation of intellectual capital measurement methods; 4) Developing the definitions of intellectual capital investments.

All explored intellectual capital investment definitions are presented in the following table: (Lentjushenkova and Lapina, 2014).

Researchers define investments in intellectual capital as different kinds of costs or expenditures, such as R&D expenditures, advertising expenditures, labor costs etc. This approach is used mainly because it is easy to collect this financial information from financial statements and annual reports (Lentjushenkova and Lapina, 2014).

Based on the study developed by Lentjushenkova and Lapina (2014)

Classifications of Investments in Intellectual Capital

A unique classification of investments in intellectual capital hasn't been found until now. The structure of investments and their direction has radically changed in the last decades. For instance, in the US between 1972 and 2011, investments in tangible assets decreased from 12% to 8%, whereas investments in intangible assets increased from 8% up to 15% (Lentjushenkova and Lapina, 2014). The situation changed also in Europe. For instance, most of the companies in France, Finland, Sweden and Netherlands made investments in intangible assets (OECD, 2013).

Big contribution to the literature was made by [START_REF] Corrado | Measuring Capital in the New Economy[END_REF], who grouped investments in intangible capital into three main groups. This study was used later on as the main framework The sample of the same study by [START_REF] Awano | Measuring Investment in Intangible Assets in the UK: Results from a New Survey[END_REF] showed that most of the companies are from service industries, rather than production industries. Most of the expenses are in-house, except for Reputation and branding, and R&D.

The investments in intangible capital have the following main components (OECD, 1998):

- 3) Maintaining investments. (Lentjushenkova and Lapina, 2014).

Making a decision to invest in a company's intellectual capital requires setting a company's goal and estimating the amount of necessary financial resources. For instance, if a company decides to invest in its R&D, that company must also invest in hiring qualified employees that will be able to perform and realize pre-planned R&D activities. At the same time, these qualified employees must be trained and educated continuously in order to keep their level of qualification competitive. Finally, if a company invests in its R&D and hires qualified personnel, it is necessary to focus on stakeholders' demands and requirements because it is not possible to imagine and generate future benefits without that (Lentjushenkova and Lapina, 2014).

Investments in Human Capital (HC)

Different definitions of human capital investments could be found in the study published by [START_REF] Ballester | The Economic Value of the R&D Intangible Asset[END_REF]. [START_REF] Sweetland | Human Capital Theory: Foundations of a Field of Inquiry[END_REF] and [START_REF] Mincer | The Distribution of Labor Incomes: A Survey with Special Reference to the Human Capital Approach[END_REF] claim that according to the human capital theory, investing in people will result in economic benefits not only for individuals, but also for companies and society. [START_REF] Edvinsson | Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower[END_REF] claim that investing in employees' competences fosters human capital, organizational knowledge, as well as a company's intellectual capital. Maximum use of human capital will create and develop both companies' future intellectual capital and total market value simultaneously (Lev, 2004).

Companies' intangible assets cannot create a future value by itself, they need to be complemented with training programs to create a value (Kaplan and Norton, 2004). According Investment in employees' training is seen as the main variable for the investment in Human capital [START_REF] Bukowitz | Visualizing, Measuring and Managing Knowledge[END_REF][START_REF] Koch | Improving labor productivity: Human resource management policies do matter[END_REF]. Training includes all different processes, formal and informal that enable employees to gain workforce skills. Forms of trainings differ from highly structured educational type to learning-by-doing (OECD, 1998). There is a general consensus about the investment in R&D because the results of this investment are related to generating new knowledge and applications that will serve on a long-term basis (OECD 1989).

García
According to the study of OECD (1998), investing in software is defined as a series of activities for digital operations that includes the development of system software, hardware and application software subdivided in standard software and custom software. Information about investments in software is hard to collect because they are linked to costs of software engineering or sales of software in almost all cases.

Investment in Research and Development (R&D)

Most studies proved that research and development (R&D) positively influence productivity, profits, sales and employment growth of a company (Lentjushenkova and Lapina, 2014). While many methods provide convenient measures for company's intellectual capital, its measures for the structural capital may be incomplete. For instance, R&D expenses and marketing expenses are expensed as they are incurred. Both R&D expenses and marketing expenses play a significantly important role in business performance nowadays (Chen, Cheng, and Hwang, 2005a). Lev and Sougiannis (1996) used a sample of 1975-1991 US public companies and proved a significant relationship between company's R&D capital and subsequent stock returns. [START_REF] Chauvin | Advertising, R&D Expenditures and the Market Value of the Firm[END_REF] also found that advertising and R&D expenditures have large and positive effects on corporate market value. This indicates higher future cash flows for companies with greater R&D and advertising expenses. [START_REF] Maggina | R & D in Greek Listed Companies: A Test of Prediction Models[END_REF] stated that one company makes decisions at least one year before investing in R&D and the forecast is around 90% adequate when using a logit specification.

R&D activity differs from other types of investments by its nature and by other attributes, such as company's specificity, information asymmetry and high level of uncertainty and risk [START_REF] Holmstrom | Agency Costs and Innovation[END_REF]. Research and development costs are not intangible assets. R&D expenses often result in the development of patents or copyrights (product, process, idea, formula etc.) [START_REF] Warfield | Intermediate Accounting: Principles and Analysis[END_REF]. Research activities are planned search or critical investigation focused on the discovery of new knowledge, whereas development activities are translation research findings into a concrete plan or design for a new product or process [START_REF] Warfield | Intermediate Accounting: Principles and Analysis[END_REF].

According to the Statement of Financial Accounting Standards No.2 -Accounting for Research and Development Costs in the United States, all R&D expenses must be expensed. Expensing means that all annual R&D expenses must be subtracted from the annual revenues (sales) in the process of net income calculation. The main characteristics of immediate expensing is that there are no future benefits. Immediate expensing alternative is capitalization -recognition process of R&D expenses as an asset in the balance sheet. The impact of capitalization of R&D has two sides: one is when R&D expenses are capitalized as an asset in the balance sheet, and the other is when that asset must be amortized. The amortization amount is also expense that appears in the profit and loss account (Deng and Lev, 2006). On average, investors make a decision to capitalize and amortize R&D expenses, rather than to expense (Deng and Lev, 2006).

The R&D expenses are related to the following [START_REF] Warfield | Intermediate Accounting: Principles and Analysis[END_REF]: 3. Acquisition of machinery to be used on current and future R&D projects.

1. Materials,
Capitalize and depreciate as R&D expense.

4. Purchase of materials to be used on current and future R&D projects.

Expense recorded immediately as R&D.

Salaries of research staff.

Expense recorded immediately as R&D.

6. Research costs incurred under contractual obligation.

Record as a receivable.

7. Material, labor and costs of prototypes.

Expense recorded immediately as R&D.

8. Costs of testing prototype and design modifications.

Expense recorded immediately as R&D.

9. Legal fees to obtain new patent.

Capitalize as a patent and amortize.

10. Executive salaries.

Expense as operating expense.

11. Costs of marketing research.

Expense as operating expense.

12. Engineering costs incurred to advance the new research equipment.

Expense recorded immediately as R&D.

13. Costs of successfully defending a patent.

Capitalize as a patent and amortize.

14. Commission to sales staff marketing.

Expense as operating expense. [START_REF] Chang | Intellectual Capital and Value Creation-Is Innovation Capital a Missing Link?[END_REF] tested the relationship between research & development (R&D) investment and operating, financial and market performance of a company. The association between these variables showed and proved a positively significant impact. This was a proof that an R&D investment is used as a source of "value creation" based on the Taiwanese example [START_REF] Chang | Intellectual Capital and Value Creation-Is Innovation Capital a Missing Link?[END_REF].

Investments in R&D have three main arguments (RICARDIS project, 2006):

-Investments in Intellectual Capital (including R&D) are important components of those resources owned by the company;

-The success of investment in R&D depends on the interaction with other intangible resources or intellectual capital components, and those are: Information and organizational capital, marketing and distribution capital, and relational capital;

-The companies' managements are interested in creating immediate value, as well as in the intangible resources that can be derived from the interaction with other resources. [START_REF] Megna | The Impact of Intangible Capital on Tobin's Q Ratio in the Semiconductor Industry[END_REF] stated that an investment in research and development is directly related to the number of patents, or, to be more precise, directly related to increasing a company's book value. Lev ( 2004) mentioned the investment in research and development of the textile company DuPont in the period from 1985 to 2000. The investment has influence on two thirds of the increase in the value generated within a company. [START_REF] Teece | Managing Intellectual Capital: Organizational, Strategic, and Policy Dimensions[END_REF] thinks that investments in R&D alone are not sufficient. To be successful, investments in R&D must produce a complementary asset that will be packed into products or services to yield value. He distinguished three types of complementary assets:

• Generic Assets need to be tailored according to the innovation, such as generalized equipment and skills;

• Specialized Assets with unilateral dependence, such as marketing and distribution channels;

• Co-Specialized Assets with bilateral dependence, such as repair facilities and machines.

important to take a broader knowledge base than the one from the past. External and internal knowledge sources must be managed properly;

III.

Human Capital -Skilled and talented people are a very important element in the whole research and development process. Developing and managing human capital is a highly important part for successful, highly innovative companies. [START_REF] Michie | HRM Practices, R&D Expenditure and Innovative Investment: Evidence from the UK's 1990 Workplace Industrial Relations Survey (WIRS)[END_REF] thinks that the skill-shortage is a serious obstacle in the research process.

IV.

Management Competences -The lack of management competences in the part of marketing, organization and innovation is another key reason why companies do not invest more in R&D. The lack of management competences makes it difficult to plan and implement R&D in a successful manner. Damodaran (2009) explored the importance of research and development expenses for the success of a company. He thinks that all expenses focused on providing benefits over multiple periods must be seen as capital expenses, and these expenses are depreciated over a certain period of time. Damodaran argues that R&D expenses must be capitalized expenses, and not operating expenses because they bring long-term benefits, such as cash flow and growth in valuation. For instance, operating costs are expenses that provide benefits only for the current period. The cost of labor and materials belong to the group of operating costs. Operating expenses do not create any asset and do not influence a company's capital. They do so only through indirect influence on retained earnings. On the other side, capital expenses are expenses that will last for a longer period, but they bring and generate benefits over multiple periods. (2006) and [START_REF] Allen | Linking Customer and Employee Satisfaction to the Bottom Line[END_REF] proved that an investment in advertising is the main variable that represents an investment in Relational capital. In order to achieve a better market and financial position, companies strive to attract more and more customers [START_REF] Aaker | The Value of Brand Equity[END_REF].

Development of Research Asset

Canibano et al. (2000) found that marketing and advertising expenses are seen as investments in intellectual capital.

The study by García-Zambrano et al. ( 2018) also proved that a positive link between the investments in Relational capital and Tobin's Q ratio results in the improvement of a company's market value. An indicator for collecting investments in Relational capital are all expenditures in advertising from the same study. Authors such as [START_REF] Allen | Linking Customer and Employee Satisfaction to the Bottom Line[END_REF], [START_REF] Charles | Strategy for a Customer-Centric Business[END_REF], [START_REF] Rucci | The Employee-customer-profit Chain at Sears[END_REF], [START_REF] Vavra | Improving Your Measurement of Customer Satisfaction: A Guide to Creating, Conducting Analyzing, and Reporting Customer Satisfaction Measurement Programs[END_REF] and [START_REF] Wiley | Linking survey results to customer satisfaction and business performance[END_REF] proved a direct positive link between customer satisfaction and loyalty indicators regarding market and financial performance.

Study by OECD (1998) explained the investments in marketing. The following activities are involved in marketing:

-Market introduction (market research, design, etc.);

-Sales (services);

-Advertising (advertisements sponsoring, promotions, public relations, etc.)

-Logistics (storage, transport, etc.)

Collection of Investments in Intellectual Capital

Sichel (2008) proposed three approaches for intellectual capital investment measurementsfinancial market valuation, other performance measures and direct expenditure data.

I.

The first approach was explored in depth by [START_REF] Brynjolfsson | The Intangible Costs and Benefits of Computer Investments: Evidence from the Financial Markets[END_REF], [START_REF] Brynjolfsson | Intangible Assets: How the Interaction of Computers and Organizational Structure Affects Stock Market Valuations[END_REF] and [START_REF] Brynjolfsson | Intangible Assets: Computers and Organizational Capital[END_REF] who identified a link between intangible investments and investments in computers in the US. Each dollar of investment in computers in a company is linked with between five and ten dollars of market value. This is explained as a huge interrelation between computer investments and existing intangibles in a company. [START_REF] Webster | The Growth of Enterprise Intangible Investment in Australia[END_REF] stated that every missing explanation about the market value of a company not explained by the existing balance sheet of tangible assets, must be explained by intangible assets;

II.

The second approach uses other performance measurements, productivity or earnings [START_REF] Barnes | Investments on Intangible Assets and Australia's Productivity Growth[END_REF]. [START_REF] Mcgrattan | Taxes, Regulations, and the Value of U.S. and U.K. Corporations[END_REF] concluded that the portion of the value of intangible capital, corporate profits, return of tangible assets and after-tax returns to tangible and intangible assets are between 31 % and 76 % of the US GDP. [START_REF] Webster | The Growth of Enterprise Intangible Investment in Australia[END_REF] found that 2.8 % per year for the last 25 years in Australia is the growth of intangible investments by using the proportion of labor force in jobs that produce intellectual capital. Lev and Radhakrishnan (2003) developed a measure of organizational capital by modelling sales of organizational capital (all expenses related to sales, general and administrative activities because they are within the organizational capital) and obtained the results that the productivity of a company's organizational capital is between 0.4 % and 0.6 % of average sales in the US companies. [START_REF] Cummins | A New Approach to the Valuation of Intangible Capital[END_REF] urged that the first two approaches can face problems and errors in measurement;

III.

The third approach tries to link expenses directly to produced intangible capital [START_REF] Barnes | Investments on Intangible Assets and Australia's Productivity Growth[END_REF]. This approach can also face measurement errors and data limitations, like the previous two approaches ( [START_REF] Barnes | Investments on Intangible Assets and Australia's Productivity Growth[END_REF]. [START_REF] Nakamura | What is the US gross investment in intangibles? (At Least) one trillion dollars a year![END_REF][START_REF] Nakamura | Intangibles: What Put the New in the New Economy?[END_REF] Lev, 2001;[START_REF] Bosworth | The Management of Intellectual Property[END_REF][START_REF] Hunter | Measuring Intangible Capital: A Review of Current Practice[END_REF]. [START_REF] Barnes | Investments on Intangible Assets and Australia's Productivity Growth[END_REF] emphasized four main measurement steps and challenges involved in investments in intangibles:

1. Collect relevant financial data for expenditures on each intangible asset;

2. Apply time series of nominal expenses;

3. Determine the percentage of expenditures share that will be seen and treated as an investment;

4. Choose appropriate deflator to calculate the value;

Capitalization and Recognition of Intellectual Capital Investments in Company's Value

Capitalizing is the process of treating expenditures as an investment and accumulating capital within a company on a long-term basis [START_REF] Barnes | Investments on Intangible Assets and Australia's Productivity Growth[END_REF]. The capitalization of R&D expenses has always been a controversial issue. Supporters of capitalization of R&D expenses claim that a long-standing asset has a positive impact on future profitability [START_REF] Ballester | The Economic Value of the R&D Intangible Asset[END_REF][START_REF] Bublitz | The Information in Discretionary Outlays: Advertising, Research, and Development[END_REF][START_REF] Sougiannis | The Accounting Based Valuation of Corporate R&D[END_REF]. Various studies proved that R&D expenses enhance a company's growth [START_REF] Mcconnell | Corporate Capital Expenditure Decisions and the Market Value of the Firm[END_REF][START_REF] Smith | The Investment Opportunity Set and Corporate Financing, Dividend, and Compensation Policies[END_REF][START_REF] Ho | Size, Leverage, Concentration, and R&D Investment in Generating Growth Opportunities[END_REF], improve benefits [START_REF] Connolly | R & D, Market Structure and Profits: A Value-Based Approach[END_REF][START_REF] Sougiannis | The Accounting Based Valuation of Corporate R&D[END_REF], productivity (Aboody and Lev, 1998;[START_REF] Ding | R&D Productivity: An Exploratory International Study[END_REF][START_REF] Sougiannis | The Accounting Based Valuation of Corporate R&D[END_REF], and stock performance [START_REF] Griliches | Market Value, R&D, and Patents[END_REF][START_REF] Hirschey | Intangible Capital Aspects of Advertising and R & D Expenditures[END_REF]. Ability to precisely measure all expenditures attributable to that intangible asset.

If
According to the paper of [START_REF] Ding | Les Determinants de La Strategie de 'Capitalisation' Des Frais de Recherche et Development[END_REF], the capitalization process of R&D expenses is possible in France, but under certain conditions. This study proved that the capitalization of R&D is a risky process, in the sense that they belong to the group of high technology industries, or have higher beta coefficient, which is related to tax of rentability on the market.

Triki-Damak and Halioui (2013) explained that in the French setting, it is up to the management to decide whether to expense or capitalize. If the conditions from the IAS 38 are met, then the capitalization process is certain. The only difference between IFRS/IAS and GAAP is the obligation to capitalize R&D expenses. GAAP does not accept the capitalization of R&D expenses, whereas IFRS/IAS allows it under certain conditions. [START_REF] Nelson | How Are Earnings Managed? Examples from Auditors[END_REF] estimated that management decision whether to capitalize or expense is linked to a company's earning management strategies. When a company has lower operating profitability in a certain year, capitalization process will commence. On the other side, when the year is more profitable, the company will then decide to expense their R&D expenditures.

Based on the French evidence, Cazavan-Jeny et al. ( 2011) established that, after controlling the industry effect, companies that make decisions to capitalize R&D expenditures spend less on R&D, have much more volatile R&D efforts, are smaller and more leveraged than companies that expense their R&D expenditures. The decision to capitalize R&D expenses influences a company's financial statements, such as balance sheet, income statement, cash flow and all related ratios, not only in the current business year, but also in the future accounting periods. [START_REF] Zhao | Relative Value Relevance of R&D Reporting: An International Comparison[END_REF] established that the value relevance of R&D expenses in France, Germany, USA and UK from 1990 to 1999 confirmed that the reported R&D expenses increased the overall value relevance. The decision to capitalize R&D may increase value for all financial statements users (Aboody and Lev, 1998;[START_REF] Healy | R&D Accounting and the Tradeoff Between Relevance and Objectivity[END_REF]Lev and Sougiannis, 1996). [START_REF] Nixon | The Accounting Treatment of Research and Development Expenditure: Views of UK Company Accountants[END_REF] argued that proponents of immediate expensing of R&D explain that a capitalization process eliminates the choice to capitalize costs of projects with much lower probability of success. Furthermore, the same author presented three main reasons why some managers are against the capitalization process:

a. it increases chances to manipulate reported numbers;

b. it is a subjective judgment decision; c. it is consistent with shortening the life-cycle of a product.

Several studies proved that expensing research and development expenses motivate managers to underinvest in R&D to meet their performance goals [START_REF] Baber | The Effect of Concern about Reported Income on Discretionary Spending Decisions: The Case of Research and Development[END_REF][START_REF] Bushee | The Influence of Institutional Investors on Myopic R&D Investment Behavior[END_REF][START_REF] Cooper | An Experimental Examination of the Effects of SFAS No. 2 on R&D Investment Decisions[END_REF]. On the other side, the study by [START_REF] Seybert | R&D Capitalization and Reputation-Driven Real Earnings Management (Partially Retracted)[END_REF] proved that managers who initiate an R&D project very often over-invest when R&D expenses are capitalized. If an R&D project leads to over-investment, then the decision whether to capitalize and expense will result in a similar decline in earning management.

Based on the literature review of [START_REF] Lentjushenkova | Intellectual Capital Investments: Analysis of the Predicted Outcomes[END_REF], different authors found the following potential outcomes of intellectual capital investments:

Figure 22 describes what the intellectual capital transformation process looks like. On one side,

we have inputs that are different intellectual capital resource quality and quality (based strictly on the resource-based approach). These inputs will be further transformed based on different external and internal factors of transformation. In the end, outcomes are company's value added as a return on investments in intellectual capital [START_REF] Molodchik | Intellectual Capital Transformation Evaluating Model[END_REF].

The Figure below presents the Intellectual Capital transformation scheme:

Figure 23: Intellectual Capital Transformation scheme [START_REF] Molodchik | Intellectual Capital Transformation Evaluating Model[END_REF]:

The Figure 23 shows that after the input of intellectual capital in the form of different intellectual capital resources and investments in those resources, there are immediate, shortterm results obtained from investing in those intellectual capital resources and there is an intellectual capital outcome which stems from intellectual capital investments that will bring welfare gains or benefits for investors. The final outcomes will depend on the quality and quantity of intellectual resources. The inputs transform into companies' benefits which are the result of investments in intellectual capital. The value creation is the key checkpoint for successful investments [START_REF] Molodchik | Intellectual Capital Transformation Evaluating Model[END_REF]. [START_REF] Molodchik | Intellectual Capital Transformation Evaluating Model[END_REF].

Work of [START_REF] Molodchik | Intellectual Capital Transformation Evaluating Model[END_REF] proposed some key points for better understanding of a transformation process:

• Companies' efforts on intellectual capital management are effective in developed markets and in knowledge-based economies.

• Human capital is relevant only in long-term returns.

• Structural capital's factors such as strategy, innovation behaviors, company's network do not play the most important role in the value creation process.

• Relational capital's effects differ depending on a particular asset and business moment.

For instance, brand generates profits at the beginning, and a company's web site generates them later.

Relation between Intellectual Capital and Performance

There are many studies that prove a strong positive relationship between intellectual capital and organizational performance [START_REF] Bontis | Intellectual Capital: An Exploratory Study That Develops Measures and Models[END_REF][START_REF] Bontis | Intellectual Capital and Business Performance in Malaysian Industries[END_REF][START_REF] Kamukama | Intellectual Capital and Performance: Testing Interaction Effects[END_REF][START_REF] Cabrita | Modelling the Creation of Value from Intellectual Capital: A Portuguese Banking Perspective[END_REF][START_REF] Seggie | Measurement of Return on Marketing Investment: A Conceptual Framework and the Future of Marketing Metrics[END_REF][START_REF] Seleim | Intellectual Capital in Egyptian Software Firms[END_REF][START_REF] Sharabati | Intellectual Capital and Business Performance in the Pharmaceutical Sector of Jordan[END_REF][START_REF] Wang | Intellectual Capital and Performance in Causal Models: Evidence from the Information Technology Industry in Taiwan[END_REF]. Because of that, there should be causal relationship between intellectual capital and organizational performance (Marr, 2005). Developing such a relationship depends on transferring intellectual capital into innovation. It is possible to successfully manage company performance in that case [START_REF] Narvekar | A New Framework to Understand the Technological Innovation Process[END_REF].

If an organization wants to achieve its performance, it is not possible without the existence of intellectual capital [START_REF] Sydler | Measuring Intellectual Capital with Financial Figures: Can We Predict Firm Profitability?[END_REF]. [START_REF] Pucci | Measuring the Relationship between Marketing Assets, Intellectual Capital and Firm Performance[END_REF] show that there is a positive link between company performance and intellectual capital. Based on the study published by [START_REF] Bontis | Intellectual Capital and Business Performance in Malaysian Industries[END_REF], it was proven that intellectual capital is a significant contributor to company performance despite different types of industries.

Intellectual capital plays an important role in the value creation process of a company [START_REF] Powell | Accounting for Intangible Assets: Current Requirements, Key Players and Future Directions[END_REF]. Even though intellectual capital is not found in the balance sheet, it influences company performance without a doubt [START_REF] Brooking | Intellectual Capital[END_REF]).

In the last few decades, the gap between market and book value has radically increased which drew the attention of many authors and researchers who started exploring the invisible value omitted from financial statements (Lev, 2001;Lev and Radhakrishnan, 2003;Lev and Zarowin, 1999). Taking into consideration the increasing gap between market and book value, researchers' attention was drawn to exploring how to measure a company's intellectual capital and whether capital market is efficient with intellectual capital [START_REF] Tseng | Intellectual Capital and Corporate Value in an Emerging Economy: Empirical Study of Taiwanese Manufacturers[END_REF][START_REF] Wang | Investigating Market Value and Intellectual Capital for S&P 500[END_REF].

Lev and Radhakrishnan (2003) created a model of sales as a function of a company's organizational capital, net fixed assets, number of employees and R&D capital and developed a firm-specific measure of organizational capital. With a sample of 250 companies, Lev and Radhakrishnan (2003) proved the significant relationship between organizational capital and market values of companies. Results also [START_REF] Tseng | Intellectual Capital and Corporate Value in an Emerging Economy: Empirical Study of Taiwanese Manufacturers[END_REF][START_REF] Wang | Investigating Market Value and Intellectual Capital for S&P 500[END_REF] proved positive relationship between intellectual capital and company's market value. There is an evidence that intellectual capital positively directs a company's price shares [START_REF] Rocca | Corporate Governance, Intellectual Capital and Value Creation[END_REF]Wu and Wang, 2004).

Based on the study of Chen et al. (2005) and by using data from Taiwanese listed companies, it can be concluded that intellectual capital is increasingly important and seen as a major drive of corporate value (Chen, Cheng, and Hwang, 2005a). Intellectual capital components have positive effects on financial company performance [START_REF] Chang | Are R&D and Intellectual Property Rights Related to the Firms' Financial Performance? The Perspectives on Intellectual Capital[END_REF]. The results of the study of [START_REF] Sumedrea | Intellectual Capital and Firm Performance: A Dynamic Relationship in Crisis Time[END_REF] showed that a company's crisis in development can be exceeded by a company's human and structural capitals. Human capital alone cannot positively influence company performance [START_REF] Hashim | Effect of Intellectual Capital on Organizational Performance[END_REF]. Human capital must be combined with other organizational capitals (Bontis, Chua Chong Keow, and Richardson, 2000). [START_REF] Muhammad | Intellectual Capital Efficiency and Firm's Performance: Study on Malaysian Financial Sectors[END_REF] proved that Human capital and Structural capital separately cannot significantly influence company performance. [START_REF] Kamaluddin | Intellectual Capital Profiles: Empirical Evidence of Malaysian Companies[END_REF] proved that companies must possess all intellectual capital components that are more balanced and have more strength to compete with other companies that possess only one intellectual capital component. Companies with balanced human, structural and relational capital can have better financial and market performance [START_REF] Hashim | Effect of Intellectual Capital on Organizational Performance[END_REF]. Until now, many studies have proven a positive relationship between Human Capital and performance [START_REF] Bontis | Intellectual Capital ROI: A Causal Map of Human Capital Antecedents and Consequents[END_REF][START_REF] Guerrero | Motivation to Train from the Workers' Perspective: Example of French Companies[END_REF][START_REF] Hermans | Value Creation Potential of Intellectual Capital in Biotechnology -Empirical Evidence from Finland[END_REF][START_REF] Rodriguez-Castellanos | Organisational Knowledge, Intangible Resources And Business Performance[END_REF]. Human capital has a positive impact on a company's profitability and productivity, whereas structural capital has a positive effect on return on equity [START_REF] Komnenic | Intellectual Capital and Corporate Performance of MNCs in Serbia[END_REF]. [START_REF] Maditinos | The Impact of Intellectual Capital on Firms' Market Value and Financial Performance[END_REF] found significant human capital and structural capital efficiency and financial company performance. [START_REF] Diez | Intellectual Capital and Value Creation in Spanish Firms[END_REF] tried to examine the influence of human capital and structural capital on the creation of business value of Spanish companies which have 25 or more employees. The study confirmed a positive relationship between the use of human and structural capital and value creation that comes from sales growth. [START_REF] Bollen | Linking Intellectual Capital and Intellectual Property to Company Performance[END_REF] found that all intellectual capital components greatly influence intellectual property. Also, intellectual property has a significant direct positive relationship with financial performance. [START_REF] Lu | Intellectual Capital and Performance in the Chinese Life Insurance Industry[END_REF] found that a company's intellectual capital is positively associated with a company's operating success. Research by [START_REF] Sydler | Measuring Intellectual Capital with Financial Figures: Can We Predict Firm Profitability?[END_REF] proved a great positive link between a company's intellectual capital and return on assets over time. The fact that there is a positive link between a company's intellectual capital and financial performance was also proven by the study of [START_REF] Tanideh | Relationship between Innovation Capital and Intellectual Capital with Value and Financial Performance[END_REF]. Based on [START_REF] Liang | The Value-Relevance of Financial and Non-Financial Information: Evidence from Taiwan Information Electronics Industry[END_REF], net income is the most important capability of the market value of Taiwanese information technology companies based on the examined intangible assets, intellectual capital and balanced scorecard. [START_REF] Bassi | Valuing Investments in Intellectual Capital[END_REF] compared intellectual capital investment and financial performance of 500 US companies and found significant positive relationship between them [START_REF] Bassi | Valuing Investments in Intellectual Capital[END_REF].

Niswah (2013) proved a positive link between intellectual capital and financial company performance, as measured by the profitability of a company, return on assets, return on equity and revenue growth.

Firer and Williams (2003) adopted the VAIC method and collected data from 75 South African publicly listed companies in order to prove the relationship between intellectual capital and a company's traditional measures, such as profitability, productivity and market value. After deep and comprehensive study, except finding a slight positive relationship between capital employed efficiency and market value, they did not succeed in finding any relationship between a company's intellectual capital and profitability and productivity [START_REF] Firer | Intellectual Capital and Traditional Measures of Corporate Performance[END_REF].

Many previous studies proved a positive relationship between intellectual capital and a company's financial performance by using the VAIC method (Kamath, 2008;Chen et al., 2005b;[START_REF] Joshi | Intellectual Capital and Financial Performance: An Evaluation of the Australian Financial Sector[END_REF][START_REF] Chu | Charting Intellectual Capital Performance of the Gateway to China[END_REF][START_REF] Pal | IC Performance of Indian Pharmaceutical and Textile Industry[END_REF]Tan et al., 2007;[START_REF] Pulic | Measuring the Performance of Intellectual Potential in Knowledge Economy[END_REF][START_REF] Pulic | VAIC TM an Accounting Tool for IC Management[END_REF]Tseng and James, 2005;[START_REF] Yalama | Intellectual Capital Performance of Quoted Banks on the Istanbul Stock Exchange Market[END_REF][START_REF] Zéghal | Analysing Value Added as an Indicator of Intellectual Capital and Its Consequences on Company Performance[END_REF]. Wang (2013) proved a significant positive relationship between intellectual capital VAIC™ method and Tobin's Q ratio of relationship between a company's market and book value.

On the other side, there are studies that proved no relationships between intellectual capital and performance of a company. The study by Mehralian et al. (2012) also failed to find any relationship between a company's intellectual capital and market value. [START_REF] Muhammad | Intellectual Capital Efficiency and Firm's Performance: Study on Malaysian Financial Sectors[END_REF] found that there is no significant relationship between human and structural capital, and company performance.

There are studies that proved no link between intellectual capital, VAIC™ and company performance, but the components of VAIC™ showed different results [START_REF] Clarke | Intellectual Capital and Firm Performance in Australia[END_REF][START_REF] Chu | Charting Intellectual Capital Performance of the Gateway to China[END_REF]Gan, 2008). Huang and Hsueh (2007) proved that there are different strengths of relationship among intellectual capital components, where structural and relational capital have better performance, whereas human capital has the poorest performance.

Intellectual Capital and Total Book Value as Company performance

During the previous several decades, companies have been trying to encode and store their intangible capital, including their knowledge and experience [START_REF] Chu | Intellectual Capital: An Empirical Study of ITRI[END_REF]. Many companies around the world agreed that knowledge assets are becoming a more important part of a company's corporate value creation than physical production factors [START_REF] Ali | Ownership Structure and Earnings Management in Malaysian Listed Companies: The Size Effect[END_REF]. Lev et al. (2005) think that intellectual capital is an intangible asset and that it must be integrated in a company's balance sheet and must present companies' realistic market value.

Some previous research showed that intellectual capital can have influence on corporate value [START_REF] Lee | Executive Pay Dispersion, Corporate Governance and Firm Performance[END_REF][START_REF] Ali | Ownership Structure and Earnings Management in Malaysian Listed Companies: The Size Effect[END_REF]Wu and Wang, 2004). [START_REF] Tanideh | Relationship between Innovation Capital and Intellectual Capital with Value and Financial Performance[END_REF] proved that there is no relationship between a company's intellectual capital and corporate value and that there is a significant positive relationship between a company's intellectual capital and financial performance. The same article provided a proof that there is no significant relationship between the innovation capital and corporate value, whereas there is a significant negative direct link between the innovation capital and financial performance. Study by [START_REF] Daryaee | Intellectual Capital, Corporate Value and Corporate Governance (Evidence from Tehran Stock Exchange (TSE)[END_REF] proved a positive relationship between a company's value and intellectual capital.

Based One of the most important indicators of success of investments in intellectual capital is return on investment (Lentjushenkova and Lapina, 2014). [START_REF] Almeida | The Return to Firm Investments in Human Capital[END_REF] explored the link between investments in human capital and productivity. They concluded that the increase in investments in trainings of 10 hours per year per employee increases company productivity by 0.6 %. At the same time, if a company does not invest in human capital, productivity automatically decreases. The increase in productivity after investing in human capital varies between 17 % and 24 %. [START_REF] Joshi | Intellectual Capital and Financial Performance: An Evaluation of the Australian Financial Sector[END_REF] made a conclusion that insufficient management of intellectual capital decreases the success of investments in intellectual capital.

Knowledge Management

Knowledge management has emerged in the last 20 years as a tendency to create, acquire and communicate knowledge and improve its utilization because of the fact that individuals themselves cannot use full potentials of their knowledge. At the same time, organizations cannot fully utilize the knowledge they possess as well, so knowledge management organizations try to acquire and create useful knowledge that can be maximally used to enhance organizational performance [START_REF] King | Knowledge Management and Organizational Learning[END_REF]. Nowadays, companies must be innovative in the highly competitive global market. Considering all challenges that they face, it is of high importance to continuously capture competitive advantage. Hesitant customers, harsh competitors, advanced technology and new business models are all elements that shape their business environment and force companies to rethink their business and operations, including knowledge management [START_REF] Nowacki | Innovations within Knowledge Management[END_REF].

In the knowledge-based economy, many companies try to apply some of the knowledge management strategies mainly because knowledge is a core intangible resource [START_REF] Skrzypek | Valuation of Knowledge and Intellectual Capital, and Their Impact on the Efficiency in the Organization[END_REF]. Because of that, companies implement different knowledge management processes that play a very important role in the whole management system (Bitkowska, 2010;[START_REF] Drucker | Innovation and Entrepreneurship: Practice and Principles[END_REF].

Term and Importance of Knowledge

Knowledge is very often defined as justified personal belief [START_REF] King | Knowledge Management and Organizational Learning[END_REF]. The importance of knowledge completely surpasses traditional resources such as labor, land and financial capital.

Knowledge can help a company to achieve a competitive advantage [START_REF] Nonaka | A Firm as a Knowledge-Creating Entity: A New Perspective on the Theory of the Firm[END_REF][START_REF] Quast | Why Knowledge Management Is Important to the Success of Your Company[END_REF][START_REF] Wu | Measuring KMS Success: A Respecification of the DeLone and McLean's Model[END_REF]. Knowledge is interpreted as information with an applied interpretation process [START_REF] Davenport | Working Knowledge: How Organizations Manage What They Know[END_REF][START_REF] Liebowitz | Does Measuring Knowledge Make 'Cents'?[END_REF][START_REF] Penrose | The Theory of the Growth of the Firm[END_REF]. The biggest attention is paid to different features of knowledge that will be available for managers to implement knowledge in management processes [START_REF] Albino | A Metric for Measuring Knowledge Codification in Organisation Learning[END_REF][START_REF] Spender | Dynamic Theory of the Firm[END_REF][START_REF] Winter | Knowledge and Comptence as as Strategic Asset[END_REF]. Knowledge has become one of the most important strategic resources for all types of companies, from start-ups and small-medium size business, up to multi-national corporations [START_REF] Holsapple | An Investigation of Factors That Influence the Management of Knowledge in Organizations[END_REF].

A review of the literature proved that traditional performance measurements have paid little attention to the importance of knowledge. Financial performance measurements were heavily criticized [START_REF] Johnson | Relevance Lost: The Rise and the Fall of Management Accounting[END_REF][START_REF] Kaplan | Measuring Manufacturing Performance: A New Challenge for Managerial Accounting Research[END_REF][START_REF] Thiel | The Performance Paradox in the Public Sector[END_REF]. In the last years, management science literature has paid attention to the role of knowledge in global competitiveness. It is recognized as a durable and more sustainable strategic resource which is necessary to obtain a competitive advantage [START_REF] Barney | Firm Resources and Sustained Competitive Advantage[END_REF][START_REF] Drucker | The Coming of the New Organization[END_REF][START_REF] Grant | Contemporary Strategy Analysis: Concepts, Techniques, Applications[END_REF].

Organizational capabilities are based on knowledge because knowledge is a resource that forms the foundation of a company's capabilities [START_REF] Prahalad | The Core Competence of the Corporation[END_REF].

A company's final performance is a result of both individual and organizational activities. At the individual level, it includes personal knowledge and individual skills and talents, whereas at the organizational level, there is infrastructure, networking, technologies, routines, systems, trade secrets and organizational culture [START_REF] Bontis | The Knowledge Toolbox[END_REF].The capacity of a company to create value is based on knowledge and competences of its employees [START_REF] Savage | Fifth Generation Management: Co-Creating through Virtual Enterprising, Dynamic Teaming, and Knowledge Networking[END_REF].

Many companies try to transform themselves into learning organizations that will pursue their objectives of continuous improvement in their knowledge assets [START_REF] Senge | The Fifth Discipline: The Art and Practice of the Learning Organization[END_REF]. Knowledge assets are fundamental strategic levers that manage business performance and enable continuous innovations of a company [START_REF] Boisot | Knowledge Assets: Securing Competitive Advantage in the Information Economy[END_REF][START_REF] Marr | Measuring and Managing Intellectual Capital and Knowledge Assets in New Economy Organization[END_REF][START_REF] Mouritsen | Developing and Managing Knowledge through Intellectual Capital Statements[END_REF][START_REF] Quinn | Intelligent Enterprise: A Knowledge and Service Based Paradigm for Industry[END_REF].

Different Types of Knowledge

Literature proposes many different typologies of knowledge, such as scientific and practical [START_REF] Hayek | The Use of Knowledge in Society[END_REF], objective and based on previous experience [START_REF] Penrose | The Theory of the Growth of the Firm[END_REF], procedural [START_REF] Winter | Knowledge and Comptence as as Strategic Asset[END_REF], incorporated [START_REF] Zuboff | the Age of the Smart Machine: The Future of Work and Power[END_REF], migratory and embedded [START_REF] Badaracco | The Knowledge Link. Competitive Advantage Though Strategic Alliances[END_REF], and codified (Blacker,1993).

One of the most used distinction of knowledge is the distinction between tacit and explicit knowledge [START_REF] Nonaka | The Knowledge-Creating Company[END_REF]Nonaka and Takeuchi, 1995;[START_REF] Polanyi | Personal Knowledge: Towards a Post-Critical Philosophy[END_REF][START_REF] Prusak | Knowledge in Organizations[END_REF][START_REF] Polanyi | The Tacit Dimension[END_REF]. [START_REF] Polanyi | Personal Knowledge[END_REF] wrote about personal and tacit types of knowledge, but at that time, he did not talk about knowledge as an object that needs to be managed. After two decades, his theory of knowledge became a central inspiration to Nonaka's theory of knowledge distribution [START_REF] Nonaka | A Dynamic Theory of Organizational Knowledge Creation[END_REF]. [START_REF] Edvinsson | Developing a Model for Managing Intellectual Capital[END_REF] proposed different types of knowledge in the Figure below. According to [START_REF] Edvinsson | Developing a Model for Managing Intellectual Capital[END_REF], knowledge can be divided into two types: codified and tacit. Knowledge that is codified can be written down, transferred and shared with others. Codified knowledge is definable and protected by the legal systems and rights.

If it is not protected adequately by the intellectual property law, it is very often copied and imitated. Tacit knowledge or know-how is difficult to transfer, define and describe. It can be rarely codified. This type of knowledge can be only demonstrated through presentations or onthe-job trainings. The Figure 24 below presents the comparison between tacit and codified knowledge [START_REF] Edvinsson | Developing a Model for Managing Intellectual Capital[END_REF]. [START_REF] Edvinsson | Developing a Model for Managing Intellectual Capital[END_REF] The Figure 24 explains the meaning of different types of knowledge. There are two types of knowledge: tacit and codified. Tacit knowledge is difficult to articulate and may be embedded in ways of doing things. On the other side, codified knowledge is knowledge that is written down in some existing document. The ownership of tacit knowledge is difficult to copy or transfer, whereas the ownership of codified knowledge is much easier to copy and it is possible to transfer, protect and use it [START_REF] Edvinsson | Developing a Model for Managing Intellectual Capital[END_REF]. [START_REF] Edvinsson | Developing a Model for Managing Intellectual Capital[END_REF] also proposed three dimensions of knowledge. The first dimension is whether knowledge can be visualized or not. The second dimension is the distinction between complexity and simplicity of knowledge. The final dimension is whether knowledge can stand alone or whether it has value only when embedded in some kind of an integrated system. Some knowledge is possible to convert into repositories through different sets of management and technological procedures, whereas on the other hand, some knowledge forever remains in employees' heads only. [START_REF] Winter | Knowledge and Comptence as as Strategic Asset[END_REF] differentiated tacit and explicit knowledge by comparing the following five dimensions in the Table 12 below: Table 12: Dimensions of knowledge assets [START_REF] Winter | Knowledge and Comptence as as Strategic Asset[END_REF] Tacit Explicit

Industrial Knowledge

• Not teachable • Articulable • Not articulated • Teachable • Not observable in use • Articulated • Complex • Observable in use • An element of a system • Simple/independent
Successfully managing tacit knowledge is a very difficult task for a company, but many companies also struggle with explicit knowledge as well. An example is an intranet. An intranet is a phenomenal sharing-knowledge tool, but it often remains unused. This is because it is necessary for a company to develop an adequate organizational structure and stimulation among employees to achieve that point [START_REF] Starovic | Understanding Corporate Value: Managing and Reporting Intellectual Capital[END_REF].

Knowledge can be acquired through different modes. The following modes are developed by Most of a company's knowledge is tacit [START_REF] Cook | Culture and Organizational Learning[END_REF]. It is accumulated through daily working experience, when employees show the ability to develop networks for sharing.

The continuous objective of a company is the creation of tacit knowledge that is characterized as analogical quality, whereas explicit knowledge is characterized as digital quality of knowledge [START_REF] Bateson | Steps to an Ecology of Mind[END_REF]. [START_REF] King | Knowledge Management and Organizational Learning[END_REF] differentiates three levels of knowledge as follows:

1) "know what" knowledge explains what action to take in certain occasions;

2) "know how" knowledge explains how to decide on a certain response to a stimulus;

3) "know why" knowledge is the highest level of knowledge, where there is the deepest understanding of causal relationship with observed stimulus.

Different types of tacit knowledge, particularly know-how and know-who are more difficult to codify and measure because companies cannot store employees' unique potentials and skills in their internal bases [START_REF] Lundvall | The Learning Economy[END_REF]. The accumulation of tacit knowledge can be done together with information technologies through learning (OECD 1996).

Definitions of Knowledge Management

Knowledge management is the process within a company that plans, organizes, motivates and controls people in order to ensure the improvement and effective use of knowledge assets.

Knowledge-related assets are all printed documents, such as patents, licenses, manuals, knowledge kept in electronic bases, knowledge related to the best ways to do jobs, knowledge related to team work and knowledge stored in company products, processes and relationships [START_REF] King | Knowledge Management and Organizational Learning[END_REF].

Knowledge management is a rapidly improving field that is made up of the collision of several others -human resources, organizational development, change management brand and reputation, information technology, valuation and performance measurement [START_REF] Bueno | Direccio´n Estrate´gica Basada En Conocimiento: Teorı´a y Pra´ctica de La Nueva Perspectiva[END_REF][START_REF] Bukowitz | The Knowledge Management Fieldbook[END_REF]Pablos, 2003). Knowledge management produces intellectual capital because intellectual capital is seen as knowledge that is of a value to a company [START_REF] Bassi | Harnessing the Power of Intellectual Capital[END_REF]. Knowledge management is defined as an art of creating value from intangible assets of a company [START_REF] Sveiby | The Intangible Assets Monitor[END_REF]. Success of a company cannot be imagined without knowledge management. If a company does not implement its own knowledge management system, it may miss all possible opportunities. One of the most important factors in any company's business is knowledge management [START_REF] Krogh | Individualist and Collectivist Perspectives on Knowledge in Organizations: Implications for Information Systems Research[END_REF]. The main goal of knowledge management is a successful utilization of company knowledge assets to ensure better knowledge practices, improved organizational behaviors, better decisions and an improved company performance [START_REF] King | Knowledge Management and Organizational Learning[END_REF]. Knowledge management is focused on intellectual capital and human resource strategies that motivate employees to be innovative and creative [START_REF] Van Beveren | A Model of Knowledge Acquisition That Refocuses Knowledge Management[END_REF].

Many studies proved that successful knowledge management has a positive impact on company performance, such as knowledge management and process performance [START_REF] Armistead | Knowledge Management and Process Performance[END_REF], knowledge management and innovativeness [START_REF] Carneiro | How Does Knowledge Management Influence Innovation and Competitiveness?[END_REF], knowledge management and business performance [START_REF] Carlucci | The Knowledge Value Chain: How Intellectual Capital Impacts on Business Performance[END_REF], knowledge management and company performance [START_REF] Carmeli | The Relationships between Intangible Organizational Elements and Organizational Performance[END_REF][START_REF] Zack | Knowledge Management and Organizational Performance: An Exploratory Analysis[END_REF], knowledge management and value creation [START_REF] Schiuma | Intellectual Capital and Company's Value Creation Dynamics[END_REF], knowledge management and a company's effectiveness [START_REF] Zack | Knowledge Management and Organizational Performance: An Exploratory Analysis[END_REF] and knowledge management and firm performance [START_REF] Liao | The Effect of Human Resource Management Control Systems on the Relationship between Knowledge Management Strategy and Firm Performance[END_REF].

Knowledge management is the process of capturing and collecting knowledge of a company and using it to increase innovations through organizational learning [START_REF] Krogh | Justification in Knowledge Creation: Dominant Logic in Management Discourses[END_REF][START_REF] Nonaka | A Dynamic Theory of Organizational Knowledge Creation[END_REF][START_REF] Nonaka | The Knowledge-Creating Company[END_REF][START_REF] Nonaka | Dynamic Business Systems for Knowledge Creation and Utilization[END_REF]Nonaka and Takeuchi, 1995;Pablos, 2003;[START_REF] Wiig | Knowledge Management Methods: Practical Approaches to Managing Knowledge[END_REF][START_REF] Wiig | Knowledge Management Foundations: Thinking about Thinking: How People and Organizations Create, Represent, and Use Knowledge[END_REF][START_REF] Wiig | Knowledge Management: An Emerging Discipline Rooted in a Long History, The Present and the Promise of Knowledge Management[END_REF]. The biggest challenge of a company is how to codify and transfer explicit and tact knowledge inside a company, among employees and departments [START_REF] Lin | The Effects of Employee Motivation, Social Interaction, and Knowledge Management Strategy on KM Implementation Level[END_REF]. [START_REF] Koskinen | Knowledge Management to Improve Project Communication and Implementation[END_REF] maintains that differentiating between explicit and implicit knowledge inside a company is especially relevant and important. This study shows an important role of knowledge management because of a trust between company's employees and members.

Knowledge management has passed through three phases of development until now: (Ordóñez de Pablos, 2003).

• The first phase lasted between 1985 and 1990 according to [START_REF] Sveiby | The Intangible Assets Monitor[END_REF]. In this phase, researchers and scientists found the inspiration in the works of Wittgenstein and Polanyi. They explored the value created by leveraging the competences and skills of people and knowledge creation more deeply.

• The second phase lasted between 1991-1997. This was the period of information technology (IT) and Internet expansion and evolution. This period was characterized by using the existing knowledge. Here, knowledge management and intellectual capital became a field of interest to many researchers around the world.

• The third phase has lasted from 1998 until now. The hot topics are organizational knowledge creation and innovation knowledge management. Employees feel that it is important to have a suitable environment where they can be comfortable, creative and able to share their knowledge [START_REF] Sveiby | The Intangible Assets Monitor[END_REF]. [START_REF] Demarest | Understanding Knowledge Management[END_REF] stated that knowledge management consists of five processes: construction, embodiment, dissemination, use and management. According to [START_REF] Miller | Building the Ultimate Resource[END_REF] knowledge management refers to the acquisition and application of knowledge. [START_REF] Armistead | Knowledge Management and Process Performance[END_REF] divides knowledge management into three processes: knowledge creation, knowledge transfer and knowledge embedding. Based on the study by [START_REF] Darroch | Knowledge Management, Innovation and Firm Performance[END_REF], knowledge management process is composed of three processes: knowledge acquisition, knowledge dissemination and knowledge utilization.

Knowledge of a company is created when tacit knowledge is converted into explicit knowledge.

The matrix in the Figure 25 shows four potential types of relations and interrelation processes between tacit and explicit knowledge [START_REF] Nonaka | A Dynamic Theory of Organizational Knowledge Creation[END_REF].

Tacit knowledge To Explicit knowledge

Socialization Externalization International Combination

Figure 25: Knowledge processes [START_REF] Nonaka | A Dynamic Theory of Organizational Knowledge Creation[END_REF] A company should be seen as a human community that is capable of using the existing information in different sufficient and successful ways in a combination with technological systems. Companies should motivate greater proactive involvement and interactions among employees, their imagination and creativity in order to recognize people's tacit knowledge.

Furthermore, companies should apply new and advanced technological systems that will establish formal and informal networks of internal and external individuals to share their information, concerns, achievements and interests [START_REF] Srivastava | Intellectual Capital Development and Management of Knowledge in Knowledge BasedEconomy[END_REF]. All activities that are Tacit Explicit linked with knowledge management will identify and explore the existing knowledge assets, acquire knowledge assets and develop new business chances [START_REF] Jarrar | Knowledge Management: Learning for Organisational Experience[END_REF]. [START_REF] Probst | Knowledge Management in Organization[END_REF] proposed the following main knowledge management processes:

1) Localizing;

2) Acquiring;

3) Developing (Creating); 4) Sharing; 5) Disseminating; 6) Leveraging;

7) Storing

The following knowledge management processes emphasize the interrelation between internal and external processes within a company which means that every employee knows what kind of knowledge lies in which part of the company and that every employee must be involved in knowledge management processes [START_REF] Probst | Knowledge Management in Organization[END_REF]. Knowledge management processes are important for one company because they leverage workforce to collaborate on new information, share data and process them according to the organizational needs. Smart knowledge management process may recognize the upcoming trends, gain new skills and partners, reduce risks and streamline company's operations. Taking into consideration these benefits, companies will make a decision to experiment with new approaches of knowledge management [START_REF] Beckman | Innovation as a Learning Process: Embedding Design Thinking[END_REF][START_REF] Brown | Change by Design: How Design Thinking Transforms Organizations and Inspires Innovation[END_REF][START_REF] Martin | The Design of Business: Why Design Thinking Is the next Competitive Advantage[END_REF]. The success of knowledge of a company depends on the following three factors: changes that enable a company to internalize knowledge, relationships between employees and organization-driven development [START_REF] Skyrme | Creating the Knowledge Based Business[END_REF].

Codification Sub-Strategies -Earl's codification sub-strategies are:

1) Systems;

2) Process;

3) Commercial;

4) Strategic;

Personalization Sub-Strategies -Earl's personalization sub-strategies are:

1) Cartographic;

2) Organizational;

3) Social.

Knowledge Management Systems

Taking into consideration the importance of knowledge in a company, many companies make decision to implement knowledge management systems (KMS) in order to improve their company's knowledge management activities. Knowledge management systems are powerful tools of a competitive advantage. Knowledge management systems are different from the traditional enterprise information systems mainly because the implementation of these systems is highly risky, highly technologically innovative and very often unstructured (Y.-M. [START_REF] Wang | Determinants of Firms' Knowledge Management System Implementation: An Empirical Study[END_REF].

Knowledge management systems (KMS) represent software or applications of company's computer-based communications and information systems to support different knowledge management processes [START_REF] King | Knowledge Management and Organizational Learning[END_REF]. Knowledge management systems are information systems that are focused on capturing organizational knowledge and making it available to employees [START_REF] Damodaran | Barriers and Facilitators to the Use of Knowledge Management Systems[END_REF]. Because the early stages entail capturing knowledge and making it available through advanced technology [START_REF] Pfaff | Overcoming Organizational Resistance to Using Wiki Technology for Knowledge Management[END_REF], many companies made great efforts and investments in their knowledge management systems [START_REF] Li | Why Do Employees Resist Knowledge Management Systems? An Empirical Study from the Status Quo Bias and Inertia Perspectives[END_REF]. However, practical implementation of a knowledge management system is not an easy task and requires a lot of effort [START_REF] Akhvan | Exploring Failure-Factors of Implementing Knowledge Management Systems in Organizations[END_REF][START_REF] Damodaran | Barriers and Facilitators to the Use of Knowledge Management Systems[END_REF]. The failure to successfully implement a knowledge management system is between 50% and 70% [START_REF] Akhvan | Exploring Failure-Factors of Implementing Knowledge Management Systems in Organizations[END_REF].

In order to improve a company's effectiveness and efficiency, many companies make a decision to implement knowledge management systems in their organization. These systems are specially designed to support and facilitate company's processes of knowledge creation, storage, retrieval, transfer and application (Alavi and Leidner, 1999). [START_REF] Lin | Examining the Factors Influencing Knowledge Management System Adoption and Continuance Intention[END_REF] confirmed that there are no precise requirements regarding knowledge management system inputs, outputs and processes, compared with traditional enterprise systems. Implementing a knowledge management system is not only a technological issue, but also a question of organizational culture, structure, process and human factors [START_REF] Bertoni | A Methodology for KEE Systems Target Cascading[END_REF][START_REF] Quaddus | Adoption and Diffusion of Knowledge Management Systems: Field Studies of Factors and Variables[END_REF]. The implementation process of a knowledge management system is technologically innovative and highly risky (Eisenhauer, 2018;Mankin, 2015;[START_REF] Soualhia | Trust and Its Link with the Knowledge Management Systems[END_REF]. Companies invest a lot of resources in the implementation of a knowledge management system [START_REF] Azhdari | Measuring Knowledge Management Readiness in ERP Adopted Organization: A Case of Iranian Company[END_REF].

The main characteristics of a knowledge management system is motivation to understand and identify factors that influence a company's implementation of a knowledge management system (Alavi and Leidner, 2001;[START_REF] Chua | Knowledge Management System Architecture: A Bridge between KM Consultants and Technologists[END_REF][START_REF] Kuo | Knowledge Management System Adoption: Exploring the Effects of Empowering Leadership, Task-Technology Fit and Compatibility[END_REF][START_REF] Leech | Knowledge Management Issues in Practice[END_REF][START_REF] Lin | Examining the Factors Influencing Knowledge Management System Adoption and Continuance Intention[END_REF]Mankin, 2015).

A knowledge management system (KMS) is an information system that is developed to manage the process of creating, storing, retrieving, transferring and applying a company's knowledge (Alavi and Leidner, 2001).

The purpose of a knowledge management system is to leverage company's knowledge management behavior. Until now, there have been three features of knowledge management systems (Alavi and Leidner, 1999;[START_REF] Bernard | A Typology of Knowledge Management System Use by Teams[END_REF]:

1) Knowledge repositories -The most common knowledge management system is the knowledge repositories [START_REF] Davenport | The Rise of Knowledge towards Attention Management[END_REF]. Knowledge repositories enable memorization of knowledge within a company and provide functions for capturing, generating, organizing, searching, retrieving and using information and knowledge [START_REF] Holsapple | Handbook on Knowledge Management 1 Knowledge Matters[END_REF][START_REF] Wasko | How Are Knowledge Management Systems Different from Information Systems, and Who Cares?[END_REF]. They offer databases that store the best practices, experience and other knowledge. Employees use knowledge repositories to be more effective and productive in their work [START_REF] Wang | Determinants of Firms' Knowledge Management System Implementation: An Empirical Study[END_REF].

2) Knowledge maps -The second type of knowledge management system is knowledge maps. Knowledge maps are highly sophisticated directories that offer indexes or catalogues of specific knowledge that different individual employees can search for [START_REF] Gray | The Effects of Knowledge Management Systems on Emergent Teams: Towards a Research Model[END_REF]. Knowledge maps offer the possibility to find and contact individuals who possess specific specialized knowledge or experience inside a company (Alavi and Leidner, 1999). The type of knowledge that is not possible to store is tacit knowledge, so most of the knowledge within a company remains uncodified. Mapping employees' knowledge is a useful way to manage knowledge (Alavi and Leidner, 2001;[START_REF] Malhotra | The Knowledge Application Gap in Information Systems Research and Education And Their Quest for the Dependent Variable[END_REF];

3) Collaborative tools -The third feature of a knowledge management system is a set of collaborative tools. These tools are groupware, email, chat, electronic forums and conferencing, and they provide communication and communication services [START_REF] Bernard | A Typology of Knowledge Management System Use by Teams[END_REF][START_REF] Chua | Knowledge Management System Architecture: A Bridge between KM Consultants and Technologists[END_REF]. The collaborative tools allow exchange of knowledge between individuals who are searching for knowledge (knowledge seekers) and knowledge providers [START_REF] Wang | Determinants of Firms' Knowledge Management System Implementation: An Empirical Study[END_REF].

Knowledge maps and collaborative tools are network-oriented knowledge management approaches characterized by interaction, linkage and dialogue between employees inside a company [START_REF] Desouza | Barriers to Effective Use of Knowledge Management System in Software Engineering[END_REF]. Knowledge maps identify the location of knowledge in a company, whereas collaborative tools allow employees to communicate and interact with each other, based on the knowledge they possess (Kankanhalli, Bernard, and Kwok-Kee, 2005).

Relation between Intellectual Capital and Knowledge Management

Petty and Guthrie (2000) investigated the ways in which the information about intellectual capital supports and helps managers in the process of knowledge management application and implementation. Information about intellectual capital is closely related to the process of application, management, development and sharing of a company's knowledge [START_REF] Drucker | Post-Capitalist Society[END_REF]. Intellectual Capital Management (ICM) and Knowledge management (KM) are multidimensions and cover most of the fields in company's operations (Wiig 1997a). The ICM and KM role is to keep and sustain the present and future body of knowledge in order to secure long-term viability and profitability of a company (Wiig,, 1997a).

The relationship between knowledge management and intellectual capital is highly important because intellectual capital statements report on activities that management supports in the name of knowledge management. Also, the term 'intellectual capital' cannot be seen as an accounting term, but it rather refers to 'capital' [START_REF] Bukh | Constructing Intellectual Capital Statements[END_REF]. Some other authors try to link intellectual capital to knowledge and knowing capabilities of social collectivity, such as organization, intellectual community or professional practice [START_REF] Nahapiet | Social Capital, Intellectual Capital, and the Organizational Advantage[END_REF].

Boudreau and Ramstad (1997) associated intellectual capital with human resource management, while [START_REF] Davenport | Working Knowledge: How Organizations Manage What They Know[END_REF] linked intellectual capital to information technology. Intellectual capital is an invisible asset of a company and it is a value for the company [START_REF] Hashim | Effect of Intellectual Capital on Organizational Performance[END_REF]. Based on this definition, it can be concluded that management of knowledge generates or produces intellectual capital [START_REF] Hashim | Effect of Intellectual Capital on Organizational Performance[END_REF]. Knowledge management is a process inside a company, whereas intellectual capital covers all company's operations [START_REF] Starovic | Understanding Corporate Value: Managing and Reporting Intellectual Capital[END_REF].

There is a significant overlap between intellectual capital management and knowledge management, but at the same time there are major differences. Intellectual capital management is focused on managing intellectual capital and its resources from strategic and enterprise perspectives. The main goal is to take care of company's intellectual capital. On the other side, knowledge management has tactical and operational perspectives, it is more detailed and focused on managing knowledge-related activities such as creation, capture, transformation and use. The main function of knowledge management is to plan, implement, operate and monitor all the knowledge-related activities for successful intellectual capital management. It is very important for knowledge management and intellectual capital to complement each other and be closely related, but not to produce potential conflicts. Knowledge management and intellectual capital allow a company to act intelligently and enable sustained competitiveness, success and profitability (Wiig, 1997a).

Integration process between intellectual capital and knowledge management is presented in the Figure 27 below: (Stainfield, 1998) The relationship between knowledge management and intellectual capital can be described as knowledge management which manages intellectual capital controlled by a company.

Knowledge management as a function describes and explains the act of managing an object, which is intellectual capital (Petty andGuthrie, 1999, 2000).

Performance Measurement Systems (PMS)

First of all, literature defines performance as ability of a company to obtain results based on limited resources for reaching specific and pre-planned objectives [START_REF] Laitinen | A Dynamic Performance Measurement System: Evidence from Small Finnish Technology Companies[END_REF][START_REF] Lebas | A Conceptual and Operational of Performance[END_REF]. In addition, performance is an output or actual work produced by a company and it refers to measuring an already obtained achievement [START_REF] Harbour | The Basics of Performance Measurement[END_REF][START_REF] Phillips | The Interactive Effects of Strategic Planning on Hotel Performance: A Neural Network Analysis[END_REF]. Measurement as a term is used to quantify and control specific activities and events [START_REF] Morgan | Structure, Speed and Salience: Performance Measurement in the Supply Chain[END_REF]. What is more, [START_REF] Bourne | Implementing Performance Measurement Systems: A Literature Review[END_REF] define measurement as metrics used to quantify the success of a business action and its effectiveness and efficiency [START_REF] Bourne | Implementing Performance Measurement Systems: A Literature Review[END_REF].

The literature of performance measurement systems has so far been improved by using different methods, measurements and perspectives. Traditional accounting methods for measuring performance were the starting point. This approach was based on the historical cost and data [START_REF] Neely | The Performance Measurement Revolution: Why Now and What Next?[END_REF]. After traditional financial measurement, it was necessary to include nonfinancial -qualitative measures of performance. There was a need for balanced approaches that will include both financial and non-financial, quantitative and qualitative measurements of

Knowledge Leadership

Sustained competitive advantage

Increased Market Value

Knowledge Management Intellectual Capital

Premium Knowledge Benchmarking performance in one unique system [START_REF] Ghalayini | The Changing Basis of Performance Measurement[END_REF][START_REF] Olve | Performance Drivers: A Practical Guide to Using the Balanced Scorecard[END_REF][START_REF] Burgess | Traditional or Contemporary? The Prevalence of Performance Measurement System Types[END_REF]. [START_REF] Neely | Performance Measurement System Design: A Literature Review and Research Agenda[END_REF] define performance measurement as a process of quantifying the effectiveness and efficiency of a business action in a company. Performance measurement system is seen as one of the most important topics in the business management area because it includes fields of accounting, operations management, marketing, business strategy and organizational customer behavior [START_REF] Neely | The Performance Measurement Revolution: Why Now and What Next?[END_REF][START_REF] Marr | Business Performance Measurement -Past, Present and Future[END_REF]. Performance measurement system with its tools allows managers in a company to balance between shortterm performance, long-term performance, growth of a company versus control, and opportunities versus threats (Simons, Dávila, and Kaplan, 2000). [START_REF] Tayles | Intellectual Capitla, Management Accounting Practices and Corporate Performance: Perception of Managers[END_REF] stated that one of the management accounting systems such as a performance management system must be innovative in capturing the contributions and real value of intellectual capital. Performance measurement system, as one of the most important control management systems enables maximum usage of company's strategic assets [START_REF] Simons | Performance Measurement & Control Systems for Implementing Strategy: Text & Case[END_REF].

Franco-Santos et al. ( 2007) classified definitions of a performance measurement system in three groups based on different perspectives and characteristics:

1) Operations perspective that refers to the performance measurement system which is used as a set of metrics to quantify efficiency and effectiveness [START_REF] Neely | Performance Measurement System Design: A Literature Review and Research Agenda[END_REF];

2) Strategic perspective that refers to the performance measurement system as a tool to achieve a company's strategy and goals [START_REF] Ittner | Performance Implications of Strategic Performance Measurement in Financial Services Firms[END_REF];

3) Accounting perspective that sees the performance measurement system as a tool for planning and budgeting performance [START_REF] Otley | Performance Management: A Framework for Management Control Systems Research[END_REF].

The information about company's strategic assets is available through the performance measurement system. Also, this implies that intellectual capital can influence company performance indirectly through the use of an adequate performance measurement system [START_REF] Kaplan | Strategic Learning & the Balanced Scorecard[END_REF]. [START_REF] Kaplan | Transforming the Balanced Scorecard from Performance Measurement to Strategic Management: Part 1[END_REF] think that effects and impact of company's knowledge assets on performance are not direct and immediate. Because of that, the link between intellectual capital and performance is worth following through the performance measurement system.

Performance measurement can be divided into three main steps [START_REF] Neely | Performance Measurement System Design: Developing and Testing a Process-based Approach[END_REF]:

1) Designing -Designing phase refers to choosing what to measure and defining measurement indicators [START_REF] Taticchi | Performance Measurement and Management: A Literature Review and a Research Agenda[END_REF];

2) Implementing -The second phase -implementing phase -refers to implementing the selected measurement indicators into practice by educating employees or developing new information systems [START_REF] Neely | Performance Measurement System Design: Developing and Testing a Process-based Approach[END_REF];

3) Using performance measures -The last phase is using performance measures because the purpose of the whole process is to produce the final result [START_REF] Liebowitz | Developing Knowledge Management Metrics for Measuring Intellectual Capital[END_REF]. [START_REF] Phillips | The Interactive Effects of Strategic Planning on Hotel Performance: A Neural Network Analysis[END_REF] claimed that identifying ways to measure business performance is not an easy task because of two reasons; first, determination of performance, competitiveness, effectiveness and other related concepts; second, difficulties in finding metrics for measurement. Until now, no agreement has been reached as to which measurement is best to use. [START_REF] Srimai | Evolutionary Paths of Performance Measurement: An Overview of Its Recent Development[END_REF] summarized key dimensions within performance measurement systems in 1980s: efficiency, effectiveness, customer, financial internal processes, growth, learning perspective, internal and external structures, stakeholders, process, people, future, etc.

The literature review of [START_REF] Zeglat | Performance Measurements Systems: Stages of Development Leading to Success[END_REF] regarding performance measurement systems has introduced several well-known balanced systems such as Balanced Scorecard [START_REF] Norton | The Balanced Scorecard -Measures That Drive Performance[END_REF], the performance pyramid system [START_REF] Cross | The 'SMART' Way to Define and Sustain Success[END_REF], the Skandia

Navigator [START_REF] Edvinsson | Developing Intellectual Capital at Skandia[END_REF], the Performance Prism System [START_REF] Neely | The Performance Prism in Practice[END_REF], the integrated dynamic performance measurement framework [START_REF] Ghalayini | An Integrated Dynamic Performance Measurement System for Improving Manufacturing Competitiveness[END_REF], the hybrid measurement system [START_REF] Laitinen | A Dynamic Performance Measurement System: Evidence from Small Finnish Technology Companies[END_REF], the knowledge-based measurement method [START_REF] Sveiby | The Intangible Assets Monitor[END_REF], the Cambridge performance measurement process -the performance measure record sheet [START_REF] Neely | Designing Performance Measures: A Structured Approach[END_REF] and the transforming performance measurement [START_REF] Spitzer | Transforming Performance Measurement: Rethinking the Way We Measure and Drive Organizational Success[END_REF]. The study by [START_REF] Roberts | Individual Performance Measures: Effects of Experience on Preference for Financial or Non-Financial Measures[END_REF] identified potential problems in implementing performance measurement systems that include both financial and non-financial measures, particularly implementing Balanced Scorecard. The implementation attempts showed limited short-term success and a need to be replaced with completely financial systems.

According to [START_REF] Cauvin | Le Balanced Scorecard : Un Outil d'évaluation de La Performance Des Actifs Intangibles[END_REF], companies' performance measurement systems are too much concentrated on the financial and historical indicators that they have become less and less relevant in the current knowledge-based economies.

Summary

This Until now, no unique and well-defined intellectual capital measurement model has been found. [START_REF] Sveiby | Methods for Measuring Intangible Assets[END_REF] classifies available intellectual capital measurement models into four main approaches: market capitalization approach, direct intellectual capital approach, return on assets approach and scorecard approach.

The use of advanced information technology and information in business management results in the rise of knowledge economy. Knowledge intensive companies have gained competitive advantage in knowledge economy. Intellectual capital is seen as the main value driver and an important factor for improving not only corporate financial performance, but also a company's market value [START_REF] Brennan | Intellectual Capital: Current Issues and Policy Implications[END_REF]Petty and Guthrie, 2000;Bozbura, 2004). So far, various researchers have added intellectual capital as a production factor, together with land, labor and financial capital [START_REF] Goh | Intellectual Capital Performance of Commercial Banks in Malaysia[END_REF]Lev and Daum, 2004;Petty and Guthrie, 2000).

A modest attempt has been made in this study to examine whether intellectual capital performance is related to financial company performance.

CHAPTER III -RESEARCH METHODOLOGY

This chapter analyses the research methodology used in the PhD dissertation. The existing research has emphasized the increasing importance of investments in intellectual capital and measurement of effects and performance of those investments. However, the literature in the area is rather fragmented and still developing. The existing literature and research discuss the selection of different measurement methods of intellectual capital and its performance; however, so far, little research has focused on investigating the performance of investing in intellectual capital components by examining how investments in intellectual capital components (human capital, organizational capital and relational capital) affect a company's final performance. Investigating these issues in the thesis is central in making the final contribution to the literature.

Conceptual Development

The management of intellectual capital and its investments is done by French companies in order to achieve higher performance. In other words, we examine the amount of value or assets value recognized and developed by an individual French company. It must be mentioned that the amount of transformation and capitalization of value differs between industries. The higher value transformed within the total book value of a company, the greater impact and performance will be achieved.

Current business and global environment cannot be easily predicted as was the case before due to the complexity of business relations and challenges that appear now and that will appear in the future. Many companies believe that entering knowledge economy is one of the safest and best business strategies to make sure that a company will survive and secure certain existence in the very competitive and turbulent global market. Companies have recently focused on knowledge and intellectual capital by managing and leveraging their potentials in order to improve their long term and immediate business performance.

Intellectual capital is the central subject of discussion in this study. At the moment, knowledge, advanced information technology, the Internet are becoming primary production factors that gain a superior competitive advantage. In the last few centuries, the revolution has been found

to have taken place in the global corporate world. The view has been changed from tangible and physical assets to a new economy called 'knowledge economy', where production and performance depend on invisible, intangible and non-physical assets. In this new global economy, the role of knowledge is highly important for gaining a competitive advantage. It is recognized as a sustainable strategic asset to acquire and help maintain better performance [START_REF] Barney | Firm Resources and Sustained Competitive Advantage[END_REF][START_REF] Drucker | The Coming of the New Organization[END_REF][START_REF] Grant | Contemporary Strategy Analysis: Concepts, Techniques, Applications[END_REF].

According to Lev (2001), the importance of intangible resources as the main gained success can be explained as a unique combination of two related economic forces. The first is seen as a business competition due to the globalization of trade and deregulation of key economic sectors such as telecommunication, electricity, transportation and financial services. The second is the advent of information technology, supported by the internet. That's why successful companies pay more attention to the recognition of knowledge assets/intangible assets/intellectual assets in knowledge economy for the purpose of surviving and developing. Many companies can be seen as knowledge intensive or high-technological companies, such as information technology, consulting, law, pharmaceutical, banking and finance and other companies whose functionality relies on intellectual assets. All organizations, more or less, require intellectual capital in the organizational structure. Greater reliance on intellectual capital will be important to maximize the value of performance and to improve market position.

. . . . .

Most of the companies are required to prepare and record their financial statements in a fair manner regarding their financial position at a certain moment and financial performance during a particular period. The goal of financial statements is to provide necessary financial information to the users of this information in their financial decision processes. Compared to management accounting which is concentrated on both internal and external purposes, the primary purpose of financial accounting is to satisfy the necessity of external users, such as debt holders, suppliers, customers, shareholders, etc. Two essential and most important statements in the set of financial statements are balance sheet and income statement. Income statement shows revenues and expenses of a company for the specific period of time. This period mostly covers 6 months or 1 year. It shows the financial performance during that period, and whether it is an accounting gain or loss. On the other side, balance sheet is the statement of the financial position of a company on a particular day. It shows the image of a company's assets, liabilities and equity. Balance sheet and income statement are closely related and linked.

If there is a financial profit at the end of a business year, it will be automatically recorded in the company's equity, and an accounting loss has the opposite effect. Business expenditure can be divided into revenue expenditures or capital expenditures. Revenue expenditures are always recorded only as expenses in the income statement because they incur and produce benefits in one single period only. In contrast, capital expenditures produce benefits in multiple periods and must be therefore recorded in the balance sheet. The method used to recognize capital expenditures is called capitalization.

Based on the IAS 16 Property, Plant and Equipment (PPE), there are two main criteria for recognition and capitalization of tangible assets within the balance sheet. The focus here is only on the tangible assets:

1. Future economic benefits will probably be associated with the item used;

2. Historical costs will probably be measured reliably. As explained, a company is simultaneously composed of both tangible and intangible assets.

According to [START_REF] Wu | Measuring KMS Success: A Respecification of the DeLone and McLean's Model[END_REF] company's intangible assets play a more important role than tangible assets in creating competitive advantage. The reasoning behind that is that tangible assets can be bought, imitated and accessed easily in factor markets by all participants. [START_REF] Barney | Firm Resources and Sustained Competitive Advantage[END_REF] stated that tangible assets fail to meet the criteria in his VRIN model to be critical factors of competitive advantage. According to the same model, knowledge is considered to be the most important company's resource taking into consideration that it fulfills all the criteria.

Despite the fact that the knowledge of company's employees is considered to be the key contributor to superior performance that will further produce economic benefits, personnel expenditures are expensed directly in the income statement. Employees cannot be owned by a company. When employees leave a company, they bring with them the knowledge they have obtained. But in order to eliminate that fact, most companies make a decision to capitalize the value. Costs related to employees' trainings are of company's future value and could be capitalized and regarded as an investment in an alternative accounting system.

The intellectual-based view of the firm, which is the focus of this thesis, represents one specific aspect of the more general resource-based view, which more narrowly considers three resources (human capital, organizational capital and relational capital) that have been theoretically connected to a company's competitive advantage [START_REF] Reed | Proposing and Testing an Intellectual Capital-Based View of the Firm[END_REF]. Furthermore, intellectual capital enables a company to survive on a competitive market [START_REF] Stewart | Intellectual Capital: The New Wealth of Organizations[END_REF]. [START_REF] Brennan | Intellectual Capital: Current Issues and Policy Implications[END_REF] claim that intellectual capital management plays an important role in realizing planned goals of a company in advance.

My thesis is a piece of work in the field of intellectual capital and investments in intellectual capital. It examines and measures the amount of investments in intellectual capital and final outcomes or values coming from the recognition of assets within a company. The study measures the success, efficiency and sufficiency of investments in intellectual capital for total book value as the final performance, in French companies only.

The third chapter that is related to Research Methodology of the thesis is organized in the following way. The research methodology part is represented as a flow that will allow every independent reader to clearly understand and utilize the topic. After a short introductory part where the key points of methodological part are presented, the background of research problem follows. It describes the research problem that needs to be examined, why this is important and relevant today not only for researchers, but also for professionalisms and managers.

After exploring the main research problem which most practitioners are faced with, the theoretical gap is identified, explained and presented. The theoretical gap is important because it proves that this study can contribute to management sciences.

The theoretical gap is followed by research objectives of the whole research that are further conceptualized in the form of research hypotheses.

Background of Research Problem

In the present global economy of knowledge, the dominant resources are found in advanced technology, information, innovations. Different academics, researchers and practitioners paid significant attention to the role of intellectual capital as the lever of maintaining competitive advantage and a sustainable company performance in the knowledge-based world. In practice, wealth is not gained through physical assets any more. Wealth is gained through intangible assets where intellectual capital is closely associated with intangible resources. Intellectual capital is linked to the main sources of not only individual, but also organizational as well as national competitiveness in the current knowledge-based global environment (Wiig 1997b).

Most of the companies today rely on their financial performance and results based on intangible assets and intellectual capital and this dependence will be more important in the upcoming years. Chartered Accountants' survey concluded that intellectual assets are highly important for a company's success [START_REF] Ghosh | Intellectual Capital and Capital Markets: Additional Evidence[END_REF]. However, benefits gained from intangible assets and intellectual capital are very hard to identify and measure, and this is where the biggest challenge and skills lie. It has been concluded that traditional measuring tools are not suitable enough in the current global economy where the intellectual capital creates value [START_REF] Edvinsson | Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower[END_REF].

Even though companies have moved from industrial age to information age, they are still not able to identify measurements of intellectual capital in their organizations. In order to measure intellectual capital, it is necessary to identify, measure and value intellectual capital and it should also be connected to a company's strategy and goals. In the knowledge economy, companies still follow traditional accounting model which is invested in the industrial age economy. Current accounting framework systems and accounting standards follow and cover physical and financial assets of an organization However, they greatly ignore intangible assets.

Growing awareness and importance of intangible assets stems directly from the increasing difference between market and book value of companies (Lev, 2001).

Knowledge management is a system that integrates people, technology and processes in one place to achieve higher results by improving performance through learning [START_REF] Gorelick | For Performance through Learning, Knowledge Management Is the Critical Practice". in The Learning Organization[END_REF]. Knowledge management helps in the process of planning, organizing, motivating and controlling people within organizational processes and systems in a company in order to enable the improvement and use of its own knowledge-related assets [START_REF] Rajesh | Towards Taxonomy Architecture of Knowledge Management for Third-party Logistics Service Provider[END_REF]. The architecture of knowledge management is composed of four main elements, and those are: knowledge components, knowledge management process, information technology and organizational aspects. Knowledge as a component in a company includes knowledge definition and knowledge categories while knowledge management process consists of the steps and activities necessary to deal with knowledge in the end.

Information technology consists of information technology-related support infrastructure such as communication lines, networks, databases etc. Finally, organizational aspects are composed of organizational culture, organizational structure and human resource management. These four elements are the main components of one knowledge management concept [START_REF] Supyuenyong | Knowledge Management Architecture: Building Blocks and Their Relationships[END_REF].

Relationship between knowledge management and intellectual capital exists without a doubt.

Intellectual capital is treated as an intelligent asset in the knowledge-oriented economy and it is used to maximize the creation of value process within companies [START_REF] Peng | Resource Fit in Inter-firm Partnership: Intellectual Capital Perspective[END_REF]. [START_REF] Bontis | National Intellectual Capital Index: A United Nations Initiative for the Arab Region[END_REF] thinks that intellectual capital represents the stock of knowledge at a certain moment that has been accumulated through knowledge inflow activities within the knowledge management process [START_REF] Shih | Assessing Knowledge Creation and Intellectual Capital in Banking Industry[END_REF]. [START_REF] Seleim | Understanding the Knowledge Managementintellectual Capital Relationship: A Two-way Analysis[END_REF] believe that intellectual capital and knowledge management are very closely related. [START_REF] Galabova | Is Intellectual Capital-Based Strategy Market-Based or Resource-Based?: On Sustainable Strategy in a Knowledge-Based Economy[END_REF] think that when knowledge is converted into value, it becomes an intellectual capital of an organization.

The creation of intellectual capital is only possible with constant interaction between human capital, structural capital and relational capital. [START_REF] Firer | Testing the Relationship between Intellectual Capital and a Company's Performance: Evidence from South Africa[END_REF] emphasized the importance of non-traditional and non-financial measurements in the current global economy. The use of traditional performance measurements is unsuitable and may lead investors and stakeholders to make bad decisions when investing large amount of financial resources. These inappropriate decisions may lead the whole company to failure.

Various research studies illustrate that intellectual capital such as knowledge, information, information technology are primary resources in the knowledge economy. According to the OECD ( 2006), many more companies nowadays invest in research and development, customer relations, employee training, computer and administrative systems etc. These investments grow each year as oppose to physical and financial investments.

Employees understand the demanded knowledge they must have and the knowledge and level of competence they must possess at the moment. Employees actively participate in the process of learning, applying, seeking and exploring. Furthermore, knowledge sharing is actively encouraged between employees, teams and departments within an organization.

The present study is a modern attempt to determine investments in intellectual capital seen as incomes, on one side, and final performance and value-creation seen as outcomes, on the other side. Investments in intellectual capital must be followed for more than one year, mainly because it is not possible to expect long-term benefits and assets recognition in such a short period of time. Investments in intellectual capital are seen and observed as expenses, collected in the official profit and loss accounts of companies. After the collection, it is necessary to determine a period of time that will be followed for each particular industry. This is important because the period of capitalization is not the same for IT, automotive or manufacturing industries. This period of useful life of assets is defined by the study produced by [START_REF] Galabova | Is Intellectual Capital-Based Strategy Market-Based or Resource-Based?: On Sustainable Strategy in a Knowledge-Based Economy[END_REF]. There is a significant difference in empirical results based on different industries. The potential influence on corporate values differs from industry to industry. For instance, the positive link exists mostly in high technology companies, financial institutions [START_REF] Ting | Intellectual Capital Performance of Financial Institutions in Malaysia[END_REF], pharmaceutical companies [START_REF] Mehralian | Intellectual Capital and Corporate Performance in Iranian Pharmaceutical Industry[END_REF], hotels, when compared to other traditional companies. Because of that, [START_REF] Riahi-Belkaoui | Intellectual Capital and Firm Performance of US Multinational Firms: A Study of the Resource-based and Stakeholder Views[END_REF] mentioned that intellectual capital has all characteristics of a strategic asset, such as being valuable, rare, imperfectly imitable and difficult to substitute. Of course, the final characteristics are related to generating a sustainable competitive advantage.

After precisely defining the period of following, the next step is to recognize capitalization of assets inside the balance sheet by absolutely respecting international accounting standards. The final stage is definitely a value-creation process and improvement in the assets within a balance sheet.

The present study is a modern attempt to examine whether there is any relation between intellectual capital and total asset value as a final performance in French companies from different industries. Intellectual capital performance is measured with an appropriate methodology. Company performance is measured in two ways; one relates to the collecting and following investments in intellectual capital, and the other relates to the collection of total book value. The research study proposes functional relationship between multiple variables.

Theoretical Gap

The main objective of each company is to maximize the value. A company's value can be market value, profits, share price, book value, etc. Different companies, such as public and private ones, process valuations in different ways. Furthermore, companies' value depends generally on their own goals of valuation. Traditional valuation methods include liquidation, accounting valuations, discounted cash flows and claim valuations. All of them obtain their calculations from financial statements, balance sheet, income statement and cash flow statement. They are based on the historic performance and it is important to take into consideration the fact that the value is not a part of the financial statement. These methods mostly use tangible assets when calculating, whereas there is a greater focus on intellectual capital and employees in the knowledge-based economies. That is why mentioned and current valuation methods are suitable in business environment [START_REF] Berzkalne | Intellectual Capital and Company Value[END_REF].

The easiest way to explain the intellectual capital is to use an example from practice. Imagine that you speak one foreign language on an advanced level, without difficulties. Undoubtedly, you possess all language skills. Nevertheless, you do not possess an internationally recognized language certificate. The situation is the same when we speak about intellectual capital. It undoubtedly exists in the company, but we do not have tools to prove it yet.

Current business environment requires investments not only in tangible resources, such as supply chain, information systems, distribution, etc., but also in intangible resources such as product development, research & development, brand awareness, trainings [START_REF] Day | The Capabilities of Market-Driven Organizations[END_REF][START_REF] Vorhies | The Capabilities and Performance Advantages of Market-driven Firms[END_REF]. This way of approaching the market fluctuations and trends resulted in reducing the effectiveness of performance measurement systems (PMS) and it does not identify the relationship between market-oriented resources and companies performance in a proper way [START_REF] Rust | Measuring Marketing Productivity: Current Knowledge and Future Directions[END_REF][START_REF] Sheth | The Antecedents and Consequences of Customer-Centric Marketing[END_REF]. The major source for generating profits and creating value has changed dramatically in the last fifty years, because the focus moved from tangible to intangible assets. These changes were accompanied with the current accounting systems that did not change dramatically and almost remained the same, which led to ineffectiveness in representing the final performance in a true and realistic way [START_REF] Busacca | IFRSs and Accounting for Intangible Assets: The Telecom Italia Case[END_REF][START_REF] Cordazzo | The Impact of IFRS on Accounting Practices: Evidence from Italian Listed Companies[END_REF].

Many studies proved that there is a positive or negative link between intellectual capital and financial performance. Also, there are many studies that proved that there is no link between intellectual capital and company performance. now, and it will be the center of my attention in the upcoming years.

In the current research, the following gaps will be presented:

• Firstly, establishing and identifying the relationship between intellectual capital and its investments and total book value as its own main performance indicator. Both parts, investments in intellectual capital and total book value are collected from official financial statements;

• Secondly, until now, there has not been a list of amortizable life of an asset per industry in France. This classification can be found in the United States, but not yet in Europe.

The study that is generally used for France is developed and published by the Ernst &

Young in 2016 [START_REF] Helmer | Worldwide Capital and Fixed Assets Guide[END_REF];

• Thirdly, there is no performance measurement system (PMS) that used total book value as a final performance in the core of its valuation. Mostly profits, share price, total market value, earnings are seen as the value of interest;

• Finally, there is a research gap in the part of the literature review that is related to investments in intellectual capital. The topic about intellectual capital has been in the center of attention for many years, but investing in intellectual capital is still in the process of exploration and development.

Research Aim and Objectives

The previous discussions allow us to reveal the fact that there is a lot of room to explore the intellectual capital topic. Until now, intellectual capital has been a subject of interest to many authors that enable us to explore and deeply understand the topic from different perspectives.

The good understanding will give us a clear dimension of interrelationships among them, intellectual capital components and final performance. [START_REF] Edvinsson | Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower[END_REF][START_REF] Eisenhardt | Dynamic Capabilities: What Are They?[END_REF] The main aim of this research is:

Investigate how the investments in intellectual capital and its components influence value creation in French companies. Investments are seen as expenditures followed in the precisely defined accounting period. The final performance relates to changes in total book value. This project proposes the framework for explaining the core elements of investments in intellectual capital and how they interact with the final performance.

The whole thesis is structured in the manner of fulfilling the following four objectives:

1) The first objective is to define investments in intellectual capital and classification of its components [START_REF] Liebowitz | Developing Knowledge Management Metrics for Measuring Intellectual Capital[END_REF]Lentjushenkova and Lapina, 2014);

2) Second objective is to define and calculate the Research asset values (Damodaran, 2009);

3) Third objective is to collect and prepare the data and calculations;

4) Final objective is reserved for testing my hypotheses and writing the thesis.

Successfully accomplishing the given research objectives will contribute to practitioners, managers, users of financial information, researchers, and scientists by providing guidelines and framework for enriching effectiveness of intellectual capital and its investments in the company performance; as well as to the academics by proposing directions for future research.

Determination of Research Methodology

Research can simply be defined as a search for knowledge. Further definition of research can be a systematic and scientific investigation for information on a specific topic. Research is an artistic and scientific search for new knowledge. Also, research can be seen as movement from known to unknown. Research is a contribution to the existing stock of knowledge [START_REF] Kothari | Research Methodology Methods & Techniques[END_REF].

There are four types of research based on Kothari ( 2004 Methodology is a study of relationships between theoretical concepts and warranted conclusions about the world around us. In particular, methodology examines the way in which practitioners confirm their theories by testing data and reasons why they decided to choose one and not the other theory. At the same time, methodology is a descriptive and prescriptive discipline. Finally, methodology does not automatically provide an algorithm for constructing or validating theory, and it is more art, than science [START_REF] Blaug | The Methodology of Economics, or, How Economists Explain[END_REF]. According to [START_REF] Kothari | Research Methodology Methods & Techniques[END_REF], research methodology is a way to solve a problem systematically.

Easterby- [START_REF] Easterby-Smith | Management Research[END_REF] made a distinction between research in management sciences and other sciences:

• Managers do not allow research access unless they see personal and commercial benefits of it;

• Managers pay attention to knowledge developed by other disciplines;

• Managers are often similarly highly educated as researchers;

• Necessary requirement for the research to have practical applicability. [START_REF] Kothari | Research Methodology Methods & Techniques[END_REF] proposed three groups of research methods:

1. Research methods that are concerned with the collection of information. These methods will be used when the current already collected data is not sufficient enough;

2. Research methods composed of statistical techniques that are used for establishing relationships between the known and unknown data; If it is not possible to collect secondary data, the whole process is questionable. The confirmation of these two steps provided a definite credibility to the research project.

Quantitative methods implemented for secondary data collection propose adequate research questions, hypotheses and research models that are statistically tested. Statistical tests show strengths of causal relationship between the proposed variables.

The final step is submitting and defending the research project that requires professional, understandable and successful PhD presentation. The presentation must provide a clear image of the whole work to any observer who is an expert in the field or who hears about the topic for the first time.

The dissertation research methodology is defined by [START_REF] Saunders | Research Methods for Business Students[END_REF] on the following key determinants:

I.

Research project will be quantitative, applied, analytical and empirical. It will be completely quantitative mainly because it will be composed of financial information and their analyses. Also, research project will be applied research because it will be aimed at proposing a solution for a problem facing a company. The research will be empirical because some variables will affect some other through experiments or empirical studies. Finally, the research project will be analytical research because the researcher or observer will use the data already available, and analyze them to make a critical evaluation of the information;

II.

Research philosophy will be positivism because the research project will not influence management sciences. The research project will be positioned neutrally, with the observation of the research problem being neutral as well;

III.

Research approach will be deductive because the data will be collected to test the theory. The knowledge-based theory which the doctorate dissertation is based on will be used. My research study is based on the knowledge-based theory because the knowledge is seen as a core company's resource. The company's knowledge cannot be controlled (von [START_REF] Krogh | Care in Knowledge Creation[END_REF], but it can be coordinated and used for achieving advanced planned goals [START_REF] Spender | Dynamic Theory of the Firm[END_REF];

IV.
Characteristics and purpose of the thesis will be examining strengths of statistical relationships between proposed research variables;

V.

Research strategy is an explanatory study that proposes a unique approach in the management sciences that has not been found until now.

According to [START_REF] Johnson | Business and Management Research Methodologies[END_REF], it is of high importance for all management and business researchers to choose an adequate research philosophy that will appear through our research strategy and make contributions not only to what we do, but also to what we investigate. Choosing one research philosophy is a matter of practical implementation and explanation of why we did not choose other alternatives compared to the philosophy that we adopted.

Remenyi (1998) stated that the positivism research philosophy is focused on social reality and that only phenomena that can be observed are possible to lead to the production of the existing data. The research strategy of positivism demands collecting data based on the development of research hypotheses. These hypotheses must be tested and confirmed (positively or negatively).

A very important statement about the positivism is that the researcher is independent and does not affect the subject of the research in any way. The developed research will not change the data and will use the collected data as they are. It is mandatory for the positivism research philosophy to have a very developed and structured research methodology [START_REF] Gill | Research Methods for Managers[END_REF].

Positivism has the data collection techniques that are most often highly structured, with large samples, measurement, and with quantitative approach [START_REF] Saunders | Research Methods for Business Students[END_REF].

When it comes to the research approach, it will be deductive because the research will test chosen theories. Deduction owes to the scientific research, which means a choice of development of theories that will be subjected to the rigorous test [START_REF] Collis | Business Research: A Practical Guide for Undergraduate & Postgraduate Students[END_REF].

Robson (2011) listed five stages of deductive research development:

1) Deducting a hypothesis (testing the strength of relationships between dependent and independent variables);

2) Expressing the defined hypothesis operationally (explaining how the variables will be measured and tested);

3) Testing the defined hypothesis operationally;

4) Examining the specific outcome of the inquiry (it will tend to confirm the theory or need for its modification);

5) If necessary, modification or improvement of the theory.

Deduction means explaining causal relationships between given variables. The research hypothesis will gather chosen variables and result in the development of research models [START_REF] Saunders | Research Methods for Business Students[END_REF]. The whole research work and its research methodology must be highly structured to facilitate replication [START_REF] Gill | Research Methods for Managers[END_REF]. At the same time, the deduction process must be operationalized. To be operationalized, the facts for the deduction process must be adequately and quantitatively measured and established. Finally, the final characteristics of deduction require its generalization. To have a generalized deduction, it is necessary to choose an adequate size of a sample to be tested statistically in social sciences [START_REF] Saunders | Research Methods for Business Students[END_REF]. [START_REF] Saunders | Research Methods for Business Students[END_REF] summarized the following characteristics of a deductive approach to research:

Table 13: Deduction approach characteristics [START_REF] Saunders | Research Methods for Business Students[END_REF]

Deduction characteristics

• Scientific principles implemented;

• Moving from research theory to data;

• Explanation of causal relationships between variables;

• Collection of quantitative data;

• Application of controls to ensure validity of data;

• Operationalization of concepts to ensure clarity of research;

• Structuration of research approach;

• Independent researcher position;

• Necessity to select samples of sufficient size Based on the Table 13 above, my research is completely deductive, where the already developed scientific principles and methods are implemented, where the collected financial and quantitative data emerge from the explored existing literature review, where the causal relationship between proposed dependent and independent variables is explained, where different tests are examined in order to ensure clarity of research, where the adequate structuration of research is applied, where the position of main research is clearly independent and where the necessary size of sample is selected [START_REF] Saunders | Research Methods for Business Students[END_REF].

The research strategies can be exploratory, descriptive and explanatory [START_REF] Yin | Case Study Research: Design and Methods[END_REF].The purpose of my research is the explanatory study that establishes causal relationships between the proposed variables. The research demands the collection of quantitative data that explains the causal relationships between them using statistical correlation testing in order to have a much clearer explanation of the relationships [START_REF] Saunders | Research Methods for Business Students[END_REF]. Experiment is a study of causal links; whether there is a change in one independent variable or another dependent variable [START_REF] Hakim | Research Design: Successful Designs for Social and Economic Research[END_REF].

The very important question is how to access the data necessary for the research and how to explain to those from whom the data are obtained why it is important. It is a matter of negotiating access and research ethics. This is the question whether it is possible to collect I would like to give an overview of dependent variables:

-Total Book Value: This value will be used from the asset's side of balance sheet of the company's financial statements as a sum up of physical, intangible and financial assets value;

-Total Non-Current Assets Value: This value will be used from the asset's side of balance sheet of the company's financial statements;

-Total Intangible Assets Value: This value will be used from the asset's side of balance sheet of the company's financial statements;

I would like to give an overview of independent variables:

-InvestR&D: This value will be collected from the income statement, i.e. from financial statements stated in the part of Research and Development Expenses;

-ResearchAsset: This value will be calculated using the formula provided by professor Damadaran;

Conceptual Framework

Both practitioners and academics have shown big interest in performance measurement of intellectual capital. When implementing innovative products, companies face difficulties of how to identify, measure and manage the performance of products. The existing literature

shows that there has been limited research in the value of performance measurement of intellectual capital, intellectual capital components and intellectual capital investments. A conceptual framework is developed below. It is structured around concepts contained in the existing literature which show one way of distinguishing performance measurement and intellectual capital investment management. The conceptual framework presents a structure for a pattern matching analysis using empirical data.

A research design represents a general plan of how the research will respond to the research question [START_REF] Saunders | Research Methods for Business Students[END_REF]. [START_REF] Kothari | Research Methodology Methods & Techniques[END_REF] defines a research design as the arrangement of conditions for collection and analysis of data in a manner that focuses on the combination of relevance to the main purpose of research. A research design shows the way the research is

The proposed Conceptual Framework is mainly inspired and justified by the Intellectual Capital Transformation Evaluating Model (ICTEM) that investigates the process of intellectual capital transformation in company performance by [START_REF] Molodchik | Intellectual Capital Transformation Evaluating Model[END_REF].

The Figure 31 below explains the process of how investments in intellectual capital impact company's book value of French companies: As we can see in the given conceptual framework, we have inputs that are in the forms of investments in intellectual capital components. Those components are Human capital, Structural capital and Relational capital. Each investment in each component of intellectual capital has its own indicators. These indicators are practical and possible to be obtained from financial statements, i.e. from the profit and loss account. The investments are seen as expenses from profit and loss account followed in a specific period of time. Investments in intellectual capital should create future value and develop new assets recognized by international accounting standards. The accent is on the transformation from investments or expenses into book value assets. The capitalization of investments in intellectual capital will result in increasing the total book value of a company. As a final output, total book value is followed,

Investments in

Intellectual capital and then total intangible asset value and total non-current asset value. These two last indicators show where the value is developed more precisely. The book value of a company, total intangible asset value and total non-current asset value are the final outputs of the research project and they are visible in financial statements, i.e. balance sheet.

Justification of Study

The justifications of this study are: a) Many past researchers in the field of intellectual capital have confined their efforts to only using qualitative research methodology. Very few combined their studies with the existing financial information or quantitative research approaches, and a very few still use mixed methodology to examine this topic. It is important because of the following:

to gain a much deeper understanding of the observed phenomena of the subject, to learn about the idiosyncrasies within a company and all potential future economic benefits;

b) The past studies mostly examined the relation of intellectual capital componentshuman capital, organizational capital and customer capital and their influence on the final performance. Very few of them studied potential investments in the components of intellectual capital. The importance of investing in intellectual capital components has become one of the most important interests of this study; c) So far, there has been no study on intellectual capital investments in French companies.

As explained before, French economy is seen as very innovative, creative and knowledge-intensive economy. This was the main motivation for choosing a sample of French companies from different industries. The study will prove and show how even smaller French companies invest in innovations and research and development based on their opportunities;

d) The final point is related to the justification of transformation of investments into real value that is recognized by the international accounting standards. This is significant because this will keep expenses within company's accounts without transformation or capitalization of expenses into value. There will be no value creation.

Research Questions

The main research question of my thesis will be:

" How do the investments in intellectual capital influence the total book value of a company based on the French evidence? "

I would like to propose the following sub-questions based on the above stated main research question:

Is it possible for investments in intellectual capital components to be transformed into the Total Book Value of a company? 1.2 Do investments in intellectual capital positively influence the Total Non-Current Assets

Value of a company?

Do investments in intellectual capital positively influence the Total Intangible Assets

Value of a company?

Do only research and development investments grouped with developed Research Asset influence total book value, total non-current asset value, or total intangible asset value?

Regarding the first sub-question, understanding transformation process is of crucial importance.

Transformation process is explained in the Literature Review where the Intellectual Capital

Value Transformation Model is presented in a more detailed way. It is interesting to see whether expenses in intellectual capital, seen as investments, and followed specific number of years transform into concrete, recognized, standardized book value. The main purpose of the thesis is to follow these investments and to prove that there is a transformation and integration of the value inside the total book value of a company. This is important because this value is recognized and visible by the accounting-setters, decision-makers, employees, stakeholders, etc. as oppose to the total market value, which is mainly not influenced and controlled by the company itself.

The second and third sub-questions come from the main research question, where we are focused only on the main total book value of a company in total. In these last sub-questions, we want to see how investments influence the total non-current asset and total intangible asset values. Total non-current asset value includes all long-term assets of a company, so the purpose is to see whether investments in intellectual capital create value in this part of the company, or not. Furthermore, the total intangible asset value is composed of all intangibles, so the purpose is to use this value as a dependent variable to see whether the transformation can create new intangibles in the company.

Finally, the last question is about the research and development investments in intellectual capital components only. The purpose is to see whether the investments in only one intellectual capital component can yield any results and effects on the company's book value, non-current asset value of intangible value, or not.

Research Process Plan

This part covers the process of conducting the whole research from the beginning until the end.

This is important to understand because it presents the development of the research process.

The research process plan is composed of the following seven steps:

1) Development of literature from the most prominent authors;

2) Identifying the theoretical gap;

3) Determining the plan for proving the research topic; The first step is related to the development of literature from the existing and most prominent authors. This part is well developed in the Second Chapter, where the literature was properly developed starting from the intangible assets, then intellectual capital, investments in intellectual capital, knowledge management and finally performance measurement systems.

The PhD dissertation started with intangible assets because intangible assets topic is broader than the intellectual capital. The goal of this part is to get an insight into the development of intangible assets from the past until now. How have intangible assets changed? Why are they so important? It was necessary to understand intangible assets deeply in order to understand intellectual capital.

Intellectual capital has been an attractive topic for the last twenty years and it has occupied the attention of many authors around the world. Even though the intellectual capital has been the center of research for many years, it is still not accepted and recognized by the international accounting standards, so authors and researchers are trying to conceptualize it. This is important as it can help remove all potential dilemmas, wrong decisions and unsuccessful investments.

Generally, intellectual capital is the strategic asset that can produce and increase company's final results.

Investing in intellectual capital is not as developed as intellectual capital in general, but it is the topic that will be important in the upcoming years. Investments in intellectual capital show that it is possible to invest not only in intellectual capital in general, but also in the particular intellectual capital components. Why is this important? Because most of the research papers are focused on measuring intellectual capital. The question that appears in most research papers is whether intellectual capital exists or not, and what is its quantity? We start with the assumption that every company has intellectual capital on a bigger or smaller scale. After definitely accepting the assumption that intellectual capital exists, the next step is to invest in it and follow its contributions.

Knowledge management is the process of identifying, codifying, storing and implementing in order to achieve pre-planned company's goals. Knowledge management and intellectual capital are two sides of the same coin. Neither of them can exist without each other. If we take a look at intellectual capital as the static component, and knowledge management as the dynamic one, we can see that intellectual capital is the critical substance that will or will not produce some future value, whereas knowledge management will follow that value creation process.

Intellectual capital lies in the core of a company, and the only question is whether it will be stimulated and used in a proper way. Knowledge management together with some of the existing performance measurement systems can follow that process properly. -Research Asset Value.

The first seven variables were collected from the database, whereas the final eighth variable "Research Asset Value" was calculated. The Research Asset Value is the value coming from the research and development expenses. The potential value is created and developed from the research and development expenses for a long, not short, period of time which is regarded as the useful life of assets. The useful life of assets is the period during which one asset can be used, amortized completely and removed from the company's property. This useful life of assets differs from industry to industry, and from country to country. The collection process included not only the collection of the useful life of all assets observed in this study, but also the main classification of industries implemented.

The sixth step includes the identification of the useful life of assets and the main classification of industries for the thesis.

The figure below was published in the Ernst & Young study by the authors [START_REF] Helmer | Worldwide Capital and Fixed Assets Guide[END_REF].

This study presented the depreciation rates of asset types and the types of depreciation methods based on the useful life of an asset. There are 11 different types of assets in total and useful life that ranges from 2 to 25 years for office buildings. In France, generally, the most used depreciation method is the straight-line method. Applicable tax depreciation rate depends mainly on useful life for tax purposes. This Ernst & Young study is absolutely adapted to the French case, so it is perfect for the thesis as well. Table 14 shows us all the potential asset types on the left, useful life for tax, type of the depreciation method and the depreciation rate. Most of the assets are tangible and intangible, so companies develop and produce particular types of assets based on the industry they belong to. That is why it was highly important to specifically identify the useful life of assets together with the adequate classification of the industries adapted to the French case. Useful life for tax starts from 2 years and finishes with the longest period of 25 years. This useful life of assets is important because it shows to me how many years I need to follow if I want to expect results from investments in the development of new assets in my study. All depreciation methods are straight-line basis with precise depreciation rates at the end.

I used this useful life of assets to link each company to the industry they belong to in order to see how many years it is necessary to follow financial information from the database. This was the key proof for my thesis. Classification of Industries that will be used is developed by [START_REF] Francis | Have Financial Statements Lost Their Relevance?[END_REF]. Francis and Schipper (1999) claimed that financial statements lost their relevance mostly because of some high-technology companies that cannot recognize all the expected cast flows in their financial statements and that are important for the investors. High-technology industries part includes all computer, electronics, pharmaceuticals and telecommunication industries.

Low-technology industries part does not include all industries, but most of those that might have unrecorded intangible assets. Based on the Table 16 we can analyze and state that, after following research and development expenses for the last 10 years, there is an unamortized portion and unamortized value that are kept and stored in the form of an asset or some value. That value will be further recognized within the company's total value. Very similar understanding of this process is used in my thesis, and the value creation process is followed in French companies. As we can see, the capitalized value of research and development expenses in the example above is $ 8,587. This value is further recognized inside a company's value and this proves that total book value has improved and increased.

What is very important is that the capitalization processes are allowed in France, like in other European and Worldwide countries, where IFRS/IAS are accepted and implemented. The capitalization process is not permitted in the US, where US GAAP are available. Research and development expenses are expensed as they incur. It is not allowed to capitalize them. In France, both decisions are allowed, and it is up to the management of a company to decide.

Generally, the decision needs to be made whether to expense research and develop expenses as they incur or to capitalize them. However, this decision is rather subjective and personal, and it brings uncertainty and risk to each manager who has to make such a decision. Taking into consideration that global environment is highly dynamic, uncertain and progressive, long-term decisions such as capitalization of research and development expenses after, 5, 10 or 20 years are very risky.

After successfully collecting data, it was necessary to prepare all the information for further analysis. Substantial time was spent only on preparing financial information because there were a lot of companies without complete information. From the initial 1,990 companies, 498 companies entered the first research model and 482 companies entered the second one. There are different companies from different industries and different sizes in this sample. After the data had been prepared, each company was identified by the industry they belonged to and the useful life of assets was automatically calculated. In that way, the number of years during which they would be followed was established from the database. In the second research model, 6

companies were removed from the sample because the useful life of assets was 20 years. These 6 companies were from the industry Low Technology -Construction -Special Trade. The observed and collected period of time was 9 years, so the observation for these 6 companies was not possible. One more company was removed from the sample from the second research model because the useful life of an asset was 25 years. The industry they belonged to was Low Technology -Wood Buildings, Mobile Homes.

When the whole sample and data were prepared, the seventh step related to statistical correlations was the next one. In the statistical, i.e. empirical chapter, all statistical correlations were implemented and applied, starting from the data sample description, justification of variables, movement of dependent and independent variables, descriptive statistics, Pearson correlations between variables, and finally, complex regression analyses.

The final step is the explanation of the produced results. From the first and second research models, the results were produced and the understanding of them tells us that investing in intellectual capital is possible only when all three components are taken into consideration. Not only one, two components of intellectual capital because. If only one is taken into consideration, investments will not have the expected results. The final results remain in the form of expenses and do not create or develop new forms of assets that will finally contribute to the improvement of total book value of a company.

confirmation of those variables being compared and tested. Scientist should not test their hypotheses empirically first, they should construct hypotheses that make some predictions about certain phenomena and then try to make tests about the hypotheses. Also, scientist should accept hypotheses that are confirmed and eliminate those disconfirmed. Testing in that way makes a difference. It is necessary to construct a model of theory to test one theory. The same theory may be formed by different models. Finally, the data employed in empirical testing importantly corresponds to the main concepts in the theories being tested.

Three main theories are a core of the research methodology in the PhD dissertation. The research theories are as follows:

1) Resource-based View;

2) Knowledge-based view;

3) Intellectual capital theory.

Resource-Based View (RBV)

According to [START_REF] Barney | Firm Resources and Sustained Competitive Advantage[END_REF], a company possesses a sustained competitive advantage "when it is implementing a value creation strategy within a company not simultaneously applied by any other competitor and when these companies are unable to duplicate the benefits of this strategy (page 102)." The same author does not speak about the specific period that defined the existence of a sustainable competitive advantage, but the inability of current and potential competitors to duplicate that strategy that makes a competitive advantage sustained.

According to [START_REF] Barney | Firm Resources and Sustained Competitive Advantage[END_REF], a company's resource must possess the following features, socalled VRIN attributes, to have necessary competitive advantage:

1. Valuable; 2. Rare;

3. In-Imitable;

4. Non-Substitutable. [START_REF] Barney | Firm Resources and Sustained Competitive Advantage[END_REF] cited [START_REF] Hirshleifer | Price Theory and Applications[END_REF] who said that "as long as the number of companies possess a particular valuable resource is less than number of companies needed to generate perfect market position and competition dynamics in an industry, that resource has the potential of generating a competitive advantage to a company. (page 107)." [START_REF] Barney | Firm Resources and Sustained Competitive Advantage[END_REF] listed three main reasons for company's resources to be imperfectly imitable:

1. Unique historical position or conditions;

2. Causal ambiguity 3. Social complexity.

The same author states the fourth reason as being substitutability that can take at least two forms. If it is not possible to imitate another company's resource precisely, it is possible to substitute it with a similar resource to serve its purposes. But, if it is a case of a strategic equivalent, none of the management teams are a source of sustained competitive advantage.

The second framework of the resource-based view (RBV) was proposed by [START_REF] Peteraf | The Cornerstones of Competitive Advantage: A Resource-Based View[END_REF], who identified the following four conditions of company's resources to be met in order to obtain sustainable competitive advantage:

1. Resource heterogeneity;

2. Ex-post limits to competition;

3. Imperfect resource mobility;

4. Ex-ante limits to competition.

Resource heterogeneity is built on the Ricardian theory or monopoly rents [START_REF] Ricardo | On the Principles of Political Economy, and Taxation[END_REF]. It means that companies of different resources are capable of competing in the market.

What [START_REF] Peteraf | The Cornerstones of Competitive Advantage: A Resource-Based View[END_REF] means by ex-post limitations to competition is that subsequent to a company's obtaining superior position and earning from rents, there must be factors which limit competition for those rents.

Imperfect resource mobility is the third out of four conditions that needs to be met.

The last condition is a highly important factor and it means that any company can establish a superior resource position, but there must be limited competition for that position.

The theory resource-based view (RBV) explains the idea that a company is composed of unique resources with diverse nature that gains competitive advantage [START_REF] Barney | Firm Resources and Sustained Competitive Advantage[END_REF][START_REF] Teece | Dynamic Capabilities and Strategic Management[END_REF][START_REF] Nelson | Why Do Firms Differ, and How Does It Matter?[END_REF][START_REF] Penrose | The Theory of the Growth of the Firm[END_REF][START_REF] Peteraf | The Cornerstones of Competitive Advantage: A Resource-Based View[END_REF][START_REF] Prahalad | The Core Competence of the Corporation[END_REF][START_REF] Rumelt | Towards a Strategic Theory of the Firm[END_REF][START_REF] Schumpeter | The Theory of Economic Development[END_REF][START_REF] Wernerfelt | A Resource-Based View of the Firm[END_REF]. Company's resources are nature resources that enable a company to conceive and implement the main strategy that will improve their effectiveness and competitiveness [START_REF] Amit | Strategic Assets and Organizational Rent: Strategic Assets[END_REF][START_REF] Grant | Dirección estratégica: conceptos, técnicas y aplicaciones[END_REF][START_REF] Grant | Contemporary Strategy Analysis: Concepts, Techniques, Applications[END_REF]. The value-based views present the way a company improves its performance through investments including intellectual capital accumulation. The resource-based view explains that a company has to secure their resources when they are [START_REF] Barney | Firm Resources and Sustained Competitive Advantage[END_REF][START_REF] Conner | A Resource-Based Theory of the Firm: Knowledge versus Opportunism[END_REF][START_REF] Grant | Contemporary Strategy Analysis: Concepts, Techniques, Applications[END_REF][START_REF] Kristandl | Constructing a Definition for Intangibles Using Resourced Based View of the Firm[END_REF][START_REF] Nelson | Why Do Firms Differ, and How Does It Matter?[END_REF][START_REF] Peteraf | The Cornerstones of Competitive Advantage: A Resource-Based View[END_REF][START_REF] Wernerfelt | A Resource-Based View of the Firm[END_REF]):

• Appropriable. The company's resource rents must exceed their cost.

• Valuable. The company's resources need to create sustainable value for the company.

• Rare. The company's resources must be secured from their competitors and heterogeneously distributed across the company.

• Durable. The company's resources must have a longer useful lifespan than the one competitor have.

• Non-transferable. Competitors must be able to acquire the same company's resources from the market.

• Imitable. The nature of company's resources must protect them from being imitated or copied.

Moreover, [START_REF] Dierickx | Asset Stock Accumulation and the Sustainability of Competitive Advantage: Reply[END_REF] expended the previous list of characteristics to the following:

• Cannot be commercialized because they are developed internally;

• Display not only intrinsic character, but also social complexity;

• Their origin lies in organizational learning and skill;

• Strong link to a company;

• Their development is questioned with the level of learning, investment, stocks and other activities.

Scholars have extended this RBV approach to dynamic markets [START_REF] Teece | Dynamic Capabilities and Strategic Management[END_REF]. In these markets, companies must possess dynamic capabilities by integrating, building and reconfiguring internal and external competencies to adapt in a rapidly changing business environment [START_REF] Teece | Dynamic Capabilities and Strategic Management[END_REF]. The successful management of knowledge resources is important in such markets (Grant, 1996;[START_REF] Koch | Improving labor productivity: Human resource management policies do matter[END_REF]. Resources are in the center of the resource-based view and can be divided into physical, human and organizational assets that can be further used for implementing value-creating strategies (Barney, 1986a;[START_REF] Wernerfelt | A Resource-Based View of the Firm[END_REF]. Company's resources define the basis of value-creating strategies that will lead to the development of competitive advantage in the dynamic markets [START_REF] Collis | Creating Corporate Advantage[END_REF][START_REF] Porter | What Is Strategy?[END_REF][START_REF] Womack | The Machine That Changed the World: The Story of Lean Production ; Toyota's Secret Weapon in the Global Car Wars That Is Revolutionizing World Industry[END_REF]. Dynamic capabilities of a company are based on the managers' integration and recombination of company's resources in order to implement new value-creating strategies (Grant, 1996;[START_REF] Pisano | Knowledge, Integration, and the Locus of Learning: An Empirical Analysis of Process Development[END_REF]. Because of that, managers are the key drivers behind the process of turning the existing resources into new sources of competitive advantage [START_REF] Teece | Dynamic Capabilities and Strategic Management[END_REF]Henderson and Cockburn, 1994).

It should be emphasized that intellectual capital is a heterogeneous resource and it is therefore important to split it into three main components and analyze each of them separately, [START_REF] Molodchik | Intellectual Capital Transformation Evaluating Model[END_REF].

Knowledge-Based View (KBV)

The key task of a manager is to protect and accumulate precious and valuable company's knowledge [START_REF] Barney | Strategic Factor Markets: Expectations, Luck, and Business Strategy[END_REF][START_REF] Teece | Dynamic Capabilities and Strategic Management[END_REF][START_REF] Rumelt | Towards a Strategic Theory of the Firm[END_REF][START_REF] Wernerfelt | A Resource-Based View of the Firm[END_REF]. Company's knowledge is a capacity to successfully convert inputs into valuable outputs [START_REF] Arrow | General Competitive Analysis, Printing[END_REF][START_REF] Debreu | Theory of Value: An Axiomatic Analysis of Economic Equilibrium[END_REF][START_REF] Nelson | An Evolutionary Theory of Economic Change[END_REF]). In the strategy literature, the common assumption is that limitations of companies should encompass these valuable resources, competencies and knowledge [START_REF] Prahalad | The Core Competence of the Corporation[END_REF]. When knowledge is developed, the decision to internationalize it or keep it as internal should be made. The company's position is to both exploit and protect knowledge. However, the main question is not how to exploit already developed knowledge, but rather how to organize and generate new knowledge within a company [START_REF] Nickerson | A Knowledge-Based Theory of the Firm-The Problem-Solving Perspective[END_REF]. Managers very often choose problems while identifying knowledge for these problems either internally, inside a company, or externally [START_REF] Nelson | An Evolutionary Theory of Economic Change[END_REF]. [START_REF] Nelson | An Evolutionary Theory of Economic Change[END_REF] defined a company's knowledge as a combination of different inputs together with all potential combinations and levels of activities within a company.

Scholars have been focused on developing a knowledge-based view or knowledge-based theory of a firm [START_REF] Conner | A Historical Comparison of Resource-Based Theory and Five Schools of Thought Within Industrial Organization Economics: Do We Have a New Theory of the Firm?[END_REF][START_REF] Conner | A Resource-Based Theory of the Firm: Knowledge versus Opportunism[END_REF][START_REF] Demsetz | The Theory of the Firm Revisited[END_REF]Grant, 1996;[START_REF] Koch | Improving labor productivity: Human resource management policies do matter[END_REF][START_REF] Madhok | Crossroads-The Organization of Economic Activity: Transaction Costs, Firm Capabilities, and the Nature of Governance[END_REF][START_REF] Nahapiet | Social Capital, Intellectual Capital, and the Organizational Advantage[END_REF]. Knowledge-based view (KBV) was initially developed by Nonaka and Takeuchi (1995). According to the knowledge-based view of the firm by [START_REF] Koch | Improving labor productivity: Human resource management policies do matter[END_REF], a firm can be seen as a social community specialized in creating and transferring knowledge. Many academics emphasized the increasing importance of knowledge for the work nature [START_REF] Drucker | Knowledge-Worker Productivity: The Biggest Challenge[END_REF]. The knowledge-based view is different from bureaucracy because all knowledge necessary for organizing and strategizing one company is located at the top management of a company [START_REF] Spender | Dynamic Theory of the Firm[END_REF]. [START_REF] Foss | Knowledge-Based Approaches to the Theory of the Firm: Some Critical Comments[END_REF] thinks that a knowledge-based view determines the issues of existence, boundaries and internal organization of a multi-person company. According to [START_REF] Foss | Strategy, Economic Organization, and the Knowledge Economy[END_REF], knowledge and its nature (tacit, socially constructed, etc.) are central to the theory of the knowledge-based view. The key elements of the knowledge-based view are:

• Knowledge is the most important resource and factor of production in a company;

• There is a difference in performance among companies because of different company's stock of knowledge and capabilities to use and develop knowledge;

• Companies exist to create, transfer and transform knowledge into competitive advantage;

• Knowledge is related to people;

• Individuals are intelligent and pro-active agents;

• People are limited by cognitive limitations; how much and what they can know has cognitive boundaries;

• When complex situation occurs, there is a need to integrate and coordinate knowledge;

• Knowledge is demonstrated and acquired in action; cognition and action are closely related;

• Knowledge can be located and demonstrated in many forms and locations; It is situated in the minds of individuals, developed within companies' processes and routines, as well as in codified databases and book;

• Different types of knowledge influences can be transferred and leveraged.

Having in mind that knowledge is the most important resource within a company, there are similarities and difference between resource-based view (RBV) and knowledge-based view (KBV) (Barney, 1986a;[START_REF] Conner | A Historical Comparison of Resource-Based Theory and Five Schools of Thought Within Industrial Organization Economics: Do We Have a New Theory of the Firm?[END_REF][START_REF] Penrose | The Theory of the Growth of the Firm[END_REF][START_REF] Wernerfelt | A Resource-Based View of the Firm[END_REF]. The RBV is interested in the essentially important productive resources (knowledge), and how they can be acquired, used, valued and protected [START_REF] Spender | Dynamic Theory of the Firm[END_REF]. On the other side, KBV is based on the opinion that knowledge cannot be controlled, but can be managed under certain conditions (von [START_REF] Krogh | Care in Knowledge Creation[END_REF], and on the way knowledge is used and coordinated [START_REF] Spender | Dynamic Theory of the Firm[END_REF].

Knowledge is highly inter-subjective, and it stems from endless social interactions among the members of a company. Even though knowledge can be accumulated and stored in databases, the most important type of knowledge is located between people [START_REF] Spender | Dynamic Theory of the Firm[END_REF]. Knowledge that is possible to imitate or duplicate is not the knowledge that will create sustainable competitive advantage for a company [START_REF] Wernerfelt | A Resource-Based View of the Firm[END_REF].

Intellectual Capital-Based View

Since the moment intellectual capital theory was initiated for the first time, when Stewart (1991) published the term 'intellectual capital' in an article, many different definitions have been released. Some definitions define intellectual capital as a unique combination of intangible assets that are the basis for further company's competitive advantage [START_REF] Andriessen | Making Sense of Intellectual Capital: Designing a Method for the Valuation of Intangibles, 1 st Edition[END_REF].

Intellectual capital theory is seen as one of the knowledge economy theories determined by the transformation of importance of tangible assets to the intangible ones. Intellectual capital theory has close connections with organizational innovation and challenges of strategic management [START_REF] Kohl | Strategic Intellectual Capital Management as a Driver of Organizational Innovation[END_REF]. This theory has been present for almost thirty years and it is not a surprise that certain paradigms influence it [START_REF] Užienė | Open Innovation, Knowledge Flows and Intellectual Capital[END_REF]. [START_REF] Ansoff | Corporate Strategy[END_REF] defined the competitive advantage follows: "to isolate characteristics unique opportunities within the field determined by the product-market scope and the growth vector.

This is what should be seen as the competitive advantage. It is of high importance to identify particular items of individual product markets that will give a company a stronger competitive position"

According to [START_REF] Reed | Proposing and Testing an Intellectual Capital-Based View of the Firm[END_REF], the intellectual capital-based view of a firm represents one specific aspect of the more general resource-based view because it considers all three resources that have been theoretically connected to a company's competitive advantage more narrowly (human capital, organizational capital and relational capital).

In the Figure below, the Intellectual Capital transformation scheme is presented:

Figure 33: Intellectual Capital Transformation scheme [START_REF] Molodchik | Intellectual Capital Transformation Evaluating Model[END_REF]:

The final outcomes depend on the quality and quantity of intellectual resources. The inputs transform into companies' benefits that arise from investments in intellectual capital. The value creation is the key checkpoint for successful investments [START_REF] Molodchik | Intellectual Capital Transformation Evaluating Model[END_REF]. Based on the Table 18 above, the key input indicators will be considered for each intellectual capital component. All expenses and costs related to the personnel charges, salaries, bonuses etc. will be considered as human capital. All research and development expenses will be considered as structural capital. Finally, all commercial activities that are related to marketing and promotions campaigns and activities, and costs of sales, all costs that are related to the relations with company's customers and clients will be considered as relational capital.

Work of [START_REF] Molodchik | Intellectual Capital Transformation Evaluating Model[END_REF] proposed some key points for better understanding of transformation process:

• The companies' efforts on intellectual capital management are possible in developed markets and in knowledge-based economies.

• Human capital is relevant only in long-term returns.

• Structural capital's factors such as strategy, innovation behaviors, company's network do not play the most important role in the value creation process.

• Relational capital's effects differ depending on a particular asset and a particular business moment. For instance, brand generates profits at the beginning followed by a company's web site.

Summary

This study aims to explain the importance of intellectual capital regarding the performance of French companies and intends to show the dimensions of intellectual capital components. The intellectual capital components represent an integral part of the general development of company's intellectual capital that will further contribute to the outstanding final performance.

This study is also about identifying the level of intellectual capital components availability and components which have a more profound effect on the performance of French companies, taking into consideration knowledge management and performance measurement systems in that value creation process.

In order to remain competitive in the market place, companies, especially those in knowledgeintensive industries, depend on intellectual assets. The main purpose of this study is to provide an evidence that acquiring intellectual capital assets generates long-term benefits. By collecting data about French companies, the study examines the association between investments in intellectual capital and total book value. The goal is to prove whether transformation process happens when there are investments in intellectual capital. The French companies observed and collected in this sample belong to all different industries.

The expected results are positive associations between independent and dependent variables because the prediction is to generate an increase in a company's value after capitalization of investments in intellectual capital. This indicates that, after investment transformation and capitalization process and recognition of assets inside the balance sheet, a company will develop new assets (tangible or intangible) that will generate profits and benefits for many years in the future.

The developed research methodology is adapted to the quantitative research approach that will

CHAPTER IV -EMPIRICAL RESEARCH

This chapter presents the empirical findings of the whole research. Many empirical studies have been done to empirically examine the impact and effects of intellectual capital on company performance. In this chapter, the empirical study fills in the reviewed literature gap. The empirical part that is concentrated on intangible resources, intellectual capital and its investments finalizes the whole research work by providing tangible results. This part is composed of the following six sub-parts.

The empirical part starts with the description of data sample, analyses of the selected sample.

The sample is composed only of French companies from 2008 to 2016. The main reasons for choosing France as an example were already explained in the section encouragement for research in intellectual capital evidence in France in the Introduction chapter. Here, the sample analyses are done in order to have better understanding of the observations we have.

The second part is related to descriptive statistics. This part is focused on describing statistical explanation of the selected sample. It is possible to conclude which further empirical steps to take based on these results.

Pearson correlations are applied after providing descriptive statistics and data sample description. Pearson correlations are important because they show the strength of correlation between all dependent and independent variables. It is crucial to see the strength between the observed variables and prepare for the complex regression.

The calculation of complex regression analyses is the next step, where the strength between independent and dependent variables shows their relation. The main question that is answered in this section is whether there is a positive or negative correlation.

Finally, the discussion about the findings presents the main results from our research study. The final findings put the whole scientific work together and provide deeply explored existing literature review. Average values for all variables are calculated for the period from 2008 until 2016.

Data Sample Description

Furthermore, we provide a deep analysis of my collected data, present the main classification of industries used for collected companies adapted for the French economy, establish useful life of assets necessary for the development of new assets adapted for the French economy, justify all variables, movements and trends of all variables, provide descriptive statistics, test of normality, complex regressions and limitations during the empirical work.

Analyses of Data Sample

We pay attention to the following points: [START_REF] Kothari | Research Methodology Methods & Techniques[END_REF] • Type of population -Only French companies are used as a sample. France implements IAS/IFRS, which is a very important condition taking into consideration that IAS/IFRS standards see expenses in intangibles as investments and require them to capitalize as soon as they are incurred, whereas US GAAP standards require no capitalization. France belongs to the group of European countries which invest the largest part of their investments in intangible assets (OECD, 2013);

• Sampling units -All companies will be grouped into smaller groups based on the industry they belong to in order to see which industry in France is intellectually capital intensive;

• Source list -The database "Point Risk" is used and necessary financial data that need to be collected are available at the University Paris 1 -Pantheon Sorbonne. Database "Point Risk" is a perfect database for collecting financial information about the biggest French companies;

• Size of my sample -Having in mind pre-planned criteria,1,990 companies are taken from the financial database;

Data Sample Description for Research Models I and II

Research Model I

In the research model I, the initial number of companies was 1,990. After detailed investigation, 1,195 companies did not have complete given financial information and demanded variables.

Furthermore, 297 companies are mentioned more than once in the database. The final number of companies observed and tested is 498.

NUMBER OF COMPANIES

As we can conclude from the sample, the largest number of companies belong to the High Technology -Computer programming, Software, Data Processing, 77 companies. 55 companies belong to the Low Technology Industry -Miscellaneous Manufacturing Industries.

In total, there are 243 companies from the High Technology industries and 239 companies from the Low Technology industries. In percentages, the chronological ratio between High

Justification of Variables

I would like to use literature and justify all the given variables in the Table 23 below.

VARIABLES AUTHORS DEPENDENT

Total Book Value [START_REF] Daryaee | Intellectual Capital, Corporate Value and Corporate Governance (Evidence from Tehran Stock Exchange (TSE)[END_REF][START_REF] Edvinsson | Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower[END_REF]ICM Group, Inc., 1998;[START_REF] Lee | Executive Pay Dispersion, Corporate Governance and Firm Performance[END_REF][START_REF] Ali | Ownership Structure and Earnings Management in Malaysian Listed Companies: The Size Effect[END_REF]Yi Wu and Wang, 2004 [START_REF] Ballester | Tracks: Labor Costs and Investments in Human Capital[END_REF][START_REF] Bontis | Intellectual Capital ROI: A Causal Map of Human Capital Antecedents and Consequents[END_REF][START_REF] Bukowitz | Visualizing, Measuring and Managing Knowledge[END_REF][START_REF] García-Zambrano | Impact of Investments in Training and Advertising on the Market Value Relevance of a Company's Intangibles: The Effect of the Economic Crisis in Spain[END_REF][START_REF] Koch | Improving labor productivity: Human resource management policies do matter[END_REF][START_REF] Lajili | Labour Cost Voluntary Disclosures and Firm Equity Values: Human Capital Information Value Relevant?[END_REF][START_REF] Martín-De-Castro | Towards 'An Intellectual Capital-Based View of the Firm': Origins and Nature[END_REF] Research and Development Expenses [START_REF] Awano | Measuring Investment in Intangible Assets in the UK: Results from a New Survey[END_REF][START_REF] Bandeira | Value of Intangibles Arising from R&D Activities[END_REF][START_REF] Martín-De-Castro | Towards 'An Intellectual Capital-Based View of the Firm': Origins and Nature[END_REF]OECD, 1989;"RICARDIS" project 2006) Commercial Costs [START_REF] Allen | Linking Customer and Employee Satisfaction to the Bottom Line[END_REF]Canibano et al., 2000;[START_REF] Cohen | Intellectual Capital and Corporate Performance in Knowledge-Intensive Smes[END_REF][START_REF] Corrado | Intangible Capital and Economic Growth[END_REF][START_REF] García-Zambrano | Impact of Investments in Training and Advertising on the Market Value Relevance of a Company's Intangibles: The Effect of the Economic Crisis in Spain[END_REF][START_REF] Martín-De-Castro | Towards 'An Intellectual Capital-Based View of the Firm': Origins and Nature[END_REF]OECD, 1998 [START_REF] Damodaran | Damodaran on Valuation: Security Analysis for Investment and Corporate Finance[END_REF](Damodaran, , 2009) ) Based on the The answer to these questions will be very interesting to examine.

On the other side, there are five following independent variables that are all confirmed and justified by the existing publications. Based on their causal relationship, all of them should contribute to the proposed dependent variables. The tendency of the author of this study is to explore the most recent studies that can justify the proposed independent variables. The Figure 34 presents the structure and organization of all companies starting from the smallest up to the largest amounts of their total book value. The value starts from €287,000 and finishes at €19,728,169,000. This is an indicator that the sample is highly diversified and heterogenous and is composed of small, medium and large French companies. We can conclude that the biggest number of companies belong to the middle group of companies. We can observe the distribution of total non-current assets value of all companies taken into the final sample in the Figure 35. What is interesting is that the distribution starts at €65,222 and finishes at €18,158,162,000. This is a big indicator that the sample is highly diversified and heterogenous and is composed of small, medium and large French companies. The situation is the same as for total book value -the company Schneider Electric Industries SAS has the highest total non-current assets value. What can be concluded here is that most of the companies observed belong to the middle-sized companies. We can see the organization of all companies in our sample and their value of total intangible assets by looking at the Figure 36. The value starts at €35,000 and finishes at €2,777,520,000.

Here also, the company that has the highest total intangible assets value is Schneider Electric Industries SAS. Movements and trends of all dependent variables are presented in the Figure 37 above. The Figure 37 has the purpose to prove that the Total Book Value variable is higher than the others, and the Total Non-Current Assets variable is higher than the Total Intangible Assets Value variables. By observing all three dependent variables, we can conclude that the distribution of company's values is equally organized, and that the final sample is composed of different companies at the same time. There are no radical differences between companies within the final sample.

Movement of Independent Variables

As described below, the following independent variables are included in the research process: The Figure 39 shows that value of research and development expenses ranges from €2,000 to €625,988,000. As we can see, the distribution of this value is highly distinctive, but majority of companies observed in the sample belong to the group of middle-sized companies. 36,002,591,784,481,500 949,238,695,524,134 2,027,861,623,283,460 60,632,591,752,763,800 4,615,111,330,303,220 18,330,624,560,269,300 837,362,954,065,728 Information about the asymmetry is needed for calculation, especially in social sciences with smaller samples that will show much more normal and precise distribution of data. Normal distribution of data in social sciences is a very rare case.

Research Asset Value variable movement

Pearson Correlations

Correlations between all variables are presented in the following table. The Pearson correlation test, i.e. non-parametric test, was applied and used for analyzing data and sample without normal distribution. Interpretations of correlation analyses results are based on the scale given by [START_REF] Cohen | Statistical Power Analysis for the Behavioral Sciences[END_REF]. Low correlation is found in coefficients of correlation between -0.29 and -0.10 or between 0.10 and 0.29, middle correlation is found in coefficients between -0.49 and -0.30 and 0.30 and 0.49, and high correlation is found in all coefficients between -1.0 and -0.5 and 0.5 and 1.

According to the Pearson correlations

Positive Positive Positive

Statistical correlations between given independent and dependent variables are presented in the The conclusion is that it is not possible to expect the increase in the total fixed assets values by investing only in one intellectual capital component.

Based on the previous detailed literature review, research methodology and empirical correlational testing, the following findings were explored:

1) A strong positive relationship between intellectual capital investments and total book value was proven. Intellectual capital investments were seen as an independent variable, whereas total book value as a dependent variable. It was proven that, when investments in all intellectual capital components are made for a longer period of time, they can produce new value recognized by the standards. Taking into consideration that all three components compose the intellectual capital as a whole, it is not possible to examine them separately. The complex regression correlations proved positive relationship that will increase value in the company's book value. Sub-models of research, together with Pearson correlations proved that predictions represent creation value in the part of intangible assets of a company;

2) Secondly, correlational relationship between one intellectual capital component and other components showed that there is a negative relationship, which is not the expected prediction. It is a signal that the value will not be created and that it will reduce the financial resources of a company through investments, and it will not be capitalized.

None of the values will be produced through investing in one intellectual capital component. The explanation for this kind of results is that it is important to have synergy of all intellectual capital components and their unitedness;

3) The final discovery is linked to the transformation of investments in intellectual capital into book value. The transformation process is possible and realistic because after a certain period of time of investing in particular intellectual capital component, it is possible to expect benefits from it. The benefits will be recognized assets, accepted and recognized inside a company's balance sheet. Why is it so important? It is important to develop new assets that will generate profits for a longer period of time, compared to the other final performances that are limited only to a few years in the future.

Developing new assets will definitely influence the financial and economic result.

Summary

The empirical results are presented in the Empirical research chapter. An observation was made into how investing in all three components of intellectual capital can influence total book value.

Also, the same question was posed when investing in only one component of intellectual capital and the effects it has on the total book value of French companies. These results are logical taking into account that it is not possible to expect future benefits without the correlation among all three components of intellectual capital. When the time comes to develop new assets, it is necessary to involve the whole organizational structure combined with organizational culture.

It is not possible to expect the creation of value only from investing in research and development if previously internal potentials, employees' skills capabilities, experience and requirements and demands from the company's stakeholders are not included at the same time.

In my study, the investments in all three components of intellectual capital, human capital, structural capital and relational capital are tested in the first model. After observing financial information for nine years, it was statistically proven that there is a strong positive relationship.

CHAPTER V -CONCLUSION

Introduction

This chapter finalizes the work of the whole thesis by presenting the key findings that will be relevant for the management science itself. This thesis has been developed from research into how and why organizations measure and invest in intellectual capital. There is a huge focus in both the academic literature and practice on measuring effects of investments in intellectual capital. When investing in intellectual capital of a company, companies face difficulties when deciding how to measure and manage these investments and how to do so in a worthwhile way.

Intellectual assets represent a substantial part of one company. Intellectual assets are a generator of value based on knowledge. Intellectual assets are invisible and non-physical substances that are difficult to be measured, understood and defined. It is without a doubt that intellectual assets are a source of a competitive advantage and increase of future value. However, they do not influence value creation directly, but rather indirectly.

Different components of intellectual capital can be categorized as human, structural and relational capital, for instance all knowledge, skills, talents, patents, know-how, software, databases, management processes, corporate strategies, brand, customer relationships, corporate culture, etc. These intellectual components are interrelated and interconnected and cannot be viewed separately, only together. Because of that, it is not possible to measure and observe components separately.

Management of intellectual capital and research of their influence on company performance demand a need for measuring its size. There are four different ways to measure its influence.

The first group of methods entails identifying all particular components directly, estimating their value and thus the total value of intellectual capital of a company. The second group of methods was based on comparing the market value with a book value of a company. If the market value is higher than the book value, then that difference is intangible. Even though intellectual capital is one of the most important generators of future value, current financial statements and annual reports do not provide relevant financial information. One of the biggest problems from this irrelevance is uncertainty when it comes to estimating future results and values by investing in a company's assets. That is why the investments in intellectual capital are generally observed as costs because it is easier like that. However, respecting the principle of caution, all long-term costs related to intangible assets must be seen as investments, not as expenses. Because of all that has been stated above, it is necessary to emphasize all the drawbacks of current traditional systems of financial reporting.

The main objective of this doctoral dissertation research is to determine the interrelation between intellectual capital as the intellectual capital and total book value of French companies That is why it was necessary to choose indicators for measuring and testing these variables showed strong positive and objective relations between dependent and independent variables.

The second research hypothesis shows that positive influence on a company's book value is not possible if the investment is made only in one intellectual capital component, which is in our case structural capital or research and development expenses. The explanation for this is that all three intellectual capital components are very closely interrelated, and it is not possible to imagine adequate results without one or two other components, such as relational capital that is linked to customers, suppliers or other stakeholders, or human capital that is linked to employees' skills, trainings and education. The results in the second research hypothesis were negative because there is no capitalization and development of new assets within a company's balance sheet without taking into consideration all the components of intellectual capital as a whole.

Completed research showed that by investing in intellectual capital components (human, structural and relational), it is possible to follow those investments on a long period of time and to follow development of new assets that will be capitalized and recognized within a company. This is important because the total book value of a company will increase by integrating new assets which will in turn generate profits and benefits in the foreseeable future.

Results Findings

Investments in intellectual capital and its success are made by implementing the Intellectual Capital Transformation Evaluating Model (ICTEM) developed by [START_REF] Molodchik | Intellectual Capital Transformation Evaluating Model[END_REF]. The present study is conducted based on the data of a sample of 498 and 482 French companies.

Overall empirical results that are based on multiple regression analysis between investments in intellectual capital and total book value, clearly indicate that investments in intellectual capital are an important determinant of the corporate financial performance of the selected sample of French companies. Findings prove that a company can enhance its total book value if it invests in its intellectual capital components, precisely in employees' salaries, trainings, education, skills etc., in organizational structures, systems, software, research and development, innovations, organizational processes, and finally in commercial activities, marketing, promotions, advertising and other. Another interesting finding is that one out of three components is not enough to enhance and improve a company's fixed asset value. It is necessary to invest in all three components at the same time. Otherwise, the results will be very uncertain, unpredictable and unexpected.

Limitations in Research

During my three-year research, I faced some limitations which I would like to present here.

The first limitation is related to the literature review. The literature review concerned with investments in intellectual capital has not been developed yet, as is the case with intellectual capital topic in general. The main difficulty was to explore and present published literature review in my work. There are a few key studies that helped me to complete the dissertation successfully, but, generally, further studies must be more developed in the upcoming years.

The second limitation is definitely related to finding an adequate transformation model that will be utilized for my conceptual framework, as well as for justifying the process of transformation from investments into real value in the whole research methodology part. Until now, the topic related to investments in intellectual capital has not been developed enough, so the need for improvement is obvious. The main difficulty was to find a research model that had already been explored, justified and used in the literature and that could be implemented in this study. The difficulty lies not only in the field of research methodology of investments in intellectual capital, but also in the literature because this topic has not been developed yet.

The third limitation was linked to finding justified indicators for my variables. Taking into consideration that until now there have not been many research models regarding the investments in intellectual capital, the next difficulty was to find the justification of each variable in my work. After deep and systematic research exploration, I found a few studies that proved and justified my given variables. This difficulty comes from the limitation in literature review of the topic investments in intellectual capital. After deep and systematic research of the existing literature regarding the topic, the given variables were justified.

The final limitation was related to collecting the quantitative data, based on the already justified variables. Most of the variables that I chose in the work are not so evident, transparent in the official annual report, for instance, research and development expenses or marketing expenses.

So, the main difficulty was to find and collect this information for my study that will play a crucial role in producing final results. Without this information, the work would definitely be different.

Contribution to Science

Based on the explored theoretical gap and completed empirical, and statistical testing, the contribution to science is evident. After a deep discovery of current literature published by the most relevant authors in the field, the justification of selected variables was done. This was important because without the existing articles and papers and precise justification and theoretical proof of these variables, the work will not be sufficient. After justifying all the variables, the precise research models were made based on the research questions, research methodology, research hypotheses and research theories. Finally, the complex statistical regression correlations that produced and proved expected positive results were made. These results proved our research hypotheses and made a big final contribution to management science.

The research contributions are described below.

First of all, the research contributes to the general body of intellectual capital concerning performance measurement. That performance is seen in the form of value in the balance sheet of a company. Until now, this performance has not been used on a larger scale generally because of the difficulties to be measured and recognized. This research provides an empirical-tested model and interrelationships between the proposed variables.

Second, the research follows the collection of investments in intellectual capital from the current financial statements. The data collection in combination with research tools and techniques developed here enables each company or organization to do the same. In this way, each company will be allowed to follow its value creation processes.

Third, the research project emphasizes the importance of recognition of value by absolutely respecting international accounting standards. This is important mainly because the difference between the total market value and total book value in each company dramatically increases each and every year. By understanding and recognizing the value in the balance sheet, the difference will be definitely reduced, accepted and capitalized. Reducing the difference will lead to improving the total performance of a company.

Fourth, the research & development (R&D) investments, as one of the very important investments in intellectual capital are seen as a part of organizational capital in a company.

Deeper understanding of research & development investments will definitely allow the management of one company to pay more attention and to improve them in the upcoming years.

Generally, accountants and management of companies did not generally look at the research & development investments and investments in intellectual capital in a proper way. These expenses were viewed as operational expenses that would last only for one year, without any benefit expectations in the future. This is the major mistake mainly because these investments should be seen as capital expenses or investments that will produce future benefits, but on a longer term only. It is not possible to expect bigger expectations in one business year. It is not possible to expect a patent to be developed in one business year. These investments are planned for a long-term period and it is the matter of business and financial understanding that must be changed (Damodaran, 2009;[START_REF] Damodaran | Investment Valuation: Tools and Techniques for Determining the Value of Any Asset[END_REF]Lentjushenkova and Lapina, 2014).

Finally, this research takes into consideration the sector of activities or industry to which, each company belongs. This is one of the most important factors that will present which industry in

France is capital-intensive by providing not only the amount of investments in intellectual aspect from global point of view, but also the amount of investments in research and development, taking into consideration the study that was published by European Innovation

Scoreboard in 2016 that proved that France is a strong innovator, not only in Europe, but in the world in general [START_REF] Hollanders | Regional Innovation Scoreboard 2016 -Methodology Report[END_REF].

Practical Applicability

The research topic concentrates on the intangible resources within a company. Intangible resources can be recognized and included inside one company, such as brands, patents, licenses, customer lists. Otherwise, they cannot be recognized by the current international accounting standards. These intangible resources such as collective knowledge, learning, leadership talents, skills, techniques, soft skills, organizational systems inside the company, relationships with stakeholders also influence the final company performance. These intangible resources are known as intellectual capital. Simply explained, intellectual capital is the difference between total market value and total book value developed by [START_REF] Edvinsson | Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower[END_REF]. This gap between total market value and total book value increases every year more and more, which can be seen as non-recognized or non-used value. Numerous previous articles have classified intellectual capital into human, organizational and relational capital and they have identified the relation with corporate performance. Also, the interrelationships have been identified

among these three components of intellectual capital that lead to the final value creation. There is an extensive and comprehensive theoretical framework for following empirical examination of the synergetic effects of intellectual capital [START_REF] Glynn | Innovative Genius: A Framework for Relating Individual and Organizational Intelligences to Innovation[END_REF]. However, it is still very unclear as to how various elements influence organizational value.

This research investigates the way the investments in intellectual capital contribute to the organizational book value by offering the practical framework that can be implemented in every company. The results of this thesis are presented in the form of statistical correlational coefficients. In that way, the projection of value creation for future period is provided.

The recognition of intellectual capital inside financial statements is a key success factor in a global and highly competitive market because it creates a highly important competitive advantage. That market has endless opportunities for researchers to explore new practices for management sciences. Intellectual capital is defined as a combination of its three components that creates future economic value. The main ability of a company today is to transform an idea or innovation into conceptualized and recognized economic value. The research starts with an extensive literature review that will present all achievements in the observed fields.

Furthermore, the study concentrates on all different sizes of French companies (small, medium and large size) from different industries. The importance is in the availability and possibility to collect particular financial information from annual reports and to follow their progress during the future period. It will be up to the management of every company to decide whether it will invest and capitalize the value after a long-term period, or whether it will expense after a shortterm period. Based on the study, it is recommendable to capitalize assets developed from investments in intellectual capital that will generate much greater benefits in the future of a company.

Recommendation for Further Research

The recommendation for further research will be definitely focused on integrating much more variables inside the same research models, such as industries, size of companies, number of employees, etc. Also, the same study could be examined for the companies from different countries implementing the IFRS/IAS standards. Furthermore, the focus will be on collecting as many variables as possible for the same or similar research models. In that way, the research results will be much more improved.

Recommendations from the research will be generally inspired by the three main recommendations given by [START_REF] Ciprian | From Visible to Hidden Intangible Assets[END_REF]:

-Introduction of generally accepted intellectual capital measurement model;

-Necessity to develop harmonized specific accounting rules that will standardize intellectual capital and its components and values;

-Proposing alternative accounting as a complementary information system.

For further research, we predict to have a research based more on the characteristics of an industry to which companies belong. This might be achieved by expanding research with more control variables and analyzed time period. Also, it is necessary not only to expand our research models with new control variables, but also to expand independent variables with more new variables that will produce results and findings with more detailed and precise outcome.

Summary

In this study, a holistic understanding of intellectual capital and investments in intellectual capital components are suggested by proposing a conceptual framework of potential value creation process within the organizational structure of a company. With this study, deficiencies in the current value creation understanding and obstacles in collecting financial information that are related to the components of intellectual capital can be overcome, where the absence of other aspects of intangible assets such as, culture, vision, mission, motivation, team spirit, benevolence, trust, honor, loyalty, values and other will significantly improve the understanding of intellectual capital. The works of [START_REF] Sveiby | The Invisible Balance Sheeet[END_REF], [START_REF] Brooking | Intellectual Capital[END_REF], Edvinsson andMalone (1997), Stewart, (1991), [START_REF] Saintonge | Tacit Knowledge: The Key to the Strategic Alignment of Intellectual Capital[END_REF]), Lev et al. (1996) and [START_REF] Sullivan | Profiting from Intellectual Capital: Extracting Value from Innovation[END_REF] have influenced and changed the thinking about the intangible-factors that determine the final success of a company [START_REF] Andriessen | Weightless Wealth: Four Modifications to Standard IC Theory[END_REF]. Intellectual capital is seen as the stored knowledge that is owned by a company that may be a tacit type of knowledge, personal knowledge possessed by one employee or may be the explicit knowledge, stored and codified by a company and its organizational structure (Nonaka and Takeuchi 1995). Many different studies proved and presented measuring, reporting and managing intellectual capital [START_REF] Brooking | Intellectual Capital[END_REF]Petty and Guthrie, 2000b;[START_REF] Sveiby | The Intangible Assets Monitor[END_REF][START_REF] Edvinsson | Developing Intellectual Capital at Skandia[END_REF][START_REF] Edvinsson | Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower[END_REF][START_REF] Mouritsen | Driving Growth: Economic Value Added versus Intellectual Capital[END_REF]Marr, 2005). The new approach to intellectual capital, where intellectual capital should improve final company performance through an indirect effect by investments in the intellectual capital components will contribute to the research field. Until now, intellectual capital or investments in intellectual capital and its components have been used in correlation with different financial performance, such as profits, market shares, market values, etc., but not total market value. The main research question was: "What will happen in total book value if we invest in intellectual capital components?" Can we expect value creation or just expenses left within the company?

The present study deeply investigated the association between investments in intellectual capital, its transformation and capitalization process and recognition of that value inside the total book value of a company. However, a company's transformation process of investments is observed by multiple dimensions. What remains to be done in this study is to analyze the value creation efficiency of investments in intellectual capital and a company's corporate value.

The investigation was based on a sample of 498 and 482 French companies from all industries respectively in two main research models. The main model was Intellectual Capital Transformation Evaluating Model (ICTEM) developed by [START_REF] Molodchik | Intellectual Capital Transformation Evaluating Model[END_REF]. This model enabled us to develop better understanding of the whole value transformation process.

The principal purpose of this study is to investigate the relationship between corporate performance and intellectual capital investments. The study includes three dimensions of intellectual capital, respectively, total book value, total non-current assets value, and total intangible assets value. On the other side, when talking about intellectual capital investments, they are respectively presented: employees' salaries and charges, research and development expenses, costs of sales, and commercial activities costs. The final findings showed that after investing in intellectual capital components, there is a capitalization process within a company and improvement of total book value.

Company's value maximization is generally considered to be one the most important objectives of every company. In the knowledge economy, the financial performance of a company is always under first observation, not only by internal users of financial information, but by external users as well. The company's financial performance is under direct or indirect influence of invisible assets and resources posed by a particular company. Those invisible assets or resources are called intellectual capital. Various empirical studies proved that intellectual capital itself directly influences financial company performance. Since intellectual capital is the main source of superior financial performance of a knowledge company, it was of high importance to examine its impact of investing in intellectual capital on the company's book value.

The PhD dissertation is finalized with the metaphoric explanation of the meaning of intellectual capital by studies published by [START_REF] Edvinsson | Intellectual Capital: Realizing Your Company's True Value by Finding Its Hidden Brainpower[END_REF] and [START_REF] Gradstrom | Accounting for Minds. An Inspirational Guide to Intellectual Capital[END_REF]. They explained the meaning of intellectual capital by arguing that the existence of tree has actually a much broader meaning and purpose, more than just the production of fruits. A tree will grow and flourish healthily to produce fruits only if it receives and absorbs enough rainfall from the sky and light from the sun in a natural environment. The tree lives according to all natural rules, disciplines, conditions and, in that case, produces necessary fruit products.

The tree normally consumes all the necessary resources for its purposes to produce maximum outputs every and each time for the benefits of all forms of life.

LIST OF FIGURES

LIST OF TABLES

  Intellectual capital, investments in intellectual capital, IFRS, IAS, knowledge, intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TITRE: LA RELATION ENTRE LES INVESTISSEMENTS DANS LE CAPITAL INTELLECTUEL ET LE TOTAL DES ACTIFS DE L'ENTREPRISE : LE CAS DES ENTREPRISES FRANCAISES (2008-2016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

  , connaissances, actifs incorporels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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INTRODUCTION ........................................................................................... 1.1BACKGROUND OF STUDY ................................................................................................. 1.2 SIGNIFICANCE OF STUDY ................................................................................................. 1.3 RESEARCH MOTIVATION ................................................................................................. 1.4 ENCOURAGEMENT FOR RESEARCH IN INTELLECTUAL CAPITAL ON FRENCH COMPANIES 1.5 ORGANIZATION OF THESIS ...............................................................................................

  main classification of intangible assets provided by the International Accounting Standard 38 includes (IAS Standard 38 Intangible Assets, page 33): , Patents and Other Industrial Property Rights; f) Recipes, Formulae, Models, Designs and Prototypes; g) Intangible Assets Under Developments.

5 )

 5 Communicate with external entities. Until now, there have been many possibilities to use intellectual capital in the creation of value process of an organization. Based on the work of Luthy (1998), Sveiby categorized measurement methods in the following four groups: I) Direct Intellectual Capital Methods (DIC) -estimate the value of intangible asset by identifying their main components. In this group, there are:

  Value Management developed the EVA™ concept in 1983 as a model for successful maximization of a company's value that can provide incentives at all levels of the company ("Stern Value Management" 2018). The EVA™ calculation formulas are presented below: EVA = NOPAT -CC = NOPAT -IC*WACC Where: CC is cost of capital; CC = WACC*IC IC = invested capital;

  The first model was developed by Edvinsson called Skandia Navigator. The next Figure presents the Skandia Navigator method:

  Some period is necessary to produce effects on company performance. The results today must come from the investments made in previous periods[START_REF] García-Zambrano | Impact of Investments in Training and Advertising on the Market Value Relevance of a Company's Intangibles: The Effect of the Economic Crisis in Spain[END_REF]. Results from investments in intellectual capital components vary from each other. For instance, studies by[START_REF] Awano | Measuring Investment in Intangible Assets in the UK: Results from a New Survey[END_REF][START_REF] Whittard | Testing and Extended R&D Survey: Interviews with Firms on Innovation Investment and Depreciation[END_REF] proved that investments in intellectual capital produce results after 3-5 years regarding training, reputation & branding, and 4-7 years regarding R&D and software. Previous

  and applied in many studies related to intangible assets (Department for BusinessInnovation & Skills, 2012). The following three groups of investments in intangible capital proposed by[START_REF] Corrado | Measuring Capital in the New Economy[END_REF] are: I) Computerized information that comprises costs in knowledge related to computer software for the purpose of their development, purchase or customization for a company's use, or computerized databases; II) Scientific and creative property covers scientific efforts of a company to develop patents, licenses and unpatented know-how and mineral reserves. Also, it refers to different expenses on commercial copyrights, licenses and designs that are concentrated on the development of industrial products, architectural and engineering designs and different research related to social sciences and humanities; III) Economic competencies are all costs and values related to human capital in order to develop an organizational structure of a company and all expenses regarding marketing and market research oriented toward a company's brand. This classification was used in the study produced by OECD (2013) for knowledge economy development. Also, Marrano et al. (2007) used the classification of investments in intellectual capital developed by Corrado et al. (2005) to explore the amount of investments in intellectual capital in the UK companies, and they reached the conclusion that only some types of investments are included as investments, such as computerized information or software. Awano et al. (2010) did a study that included 838 responses from UK companies. The purpose of the study was to identify results of investments in intellectual capital in UK companies.Beside six different investments in intellectual capital, the study measured the life span of investments. The survey is focused on the following six categories of investments in intellectual capitalprocess improvement.

  investments in intangibles are (OECD, 1998): -Development of the organization; -Engineering and design; -Construction and use of databases; -Remuneration for innovative ideas; -Other human resource development (training excluded).The Figure19shows the core components of possible investments in intangible capital by Alison Young from OECD secretariat (1998).

Figure 19 :

 19 Figure19: Possible components of investments in intangible capital(OECD secretariat, author Alison Young 1998)

Figure 20 :

 20 Figure 20: Intellectual capital investments classification(Lentjushenkova and Lapina, 2014)

  to the McKinsey quarterly research study published by[START_REF] Desmet | Getting More from Your Training Programs[END_REF], companies all around the world spend 100 billions of dollars on training human resources.[START_REF] Ballester | Tracks: Labor Costs and Investments in Human Capital[END_REF] and[START_REF] Lajili | Labour Cost Voluntary Disclosures and Firm Equity Values: Human Capital Information Value Relevant?[END_REF] define labor costs as human capital investments.[START_REF] Bontis | Intellectual Capital ROI: A Causal Map of Human Capital Antecedents and Consequents[END_REF] see training and development expenditures as indicators of measurement of human capital investments. According to Kim andLee (2007), employees obtain experience and knowledge while working in a company. Knowledge and experience can be seen as investments in human capital accumulation because 20% of the working time is included in this type of investment.

1 ) 2 ) 1 ) 2 )

 1212 Technological capital -Includes the following variables: efforts in research and development, technological infrastructure including the purchase of advanced technology and intellectual and industry property; Organizational capital -Includes the following indicators: organizational culture, values and attitude, information and telecommunication capabilities and organizational structure; According to the definition of Frascati Manual (OECD, 1994), research and development includes creative work with a systematic basis aimed at increasing the stock of knowledge. The three main activities are covered: Basic research: theoretical and experimental work with a purpose to acquire new knowledge about observable facts; Applied research: original investigation focused on realizing a specific aim or objective in order to acquire new knowledge; 3) Experimental development: systematic research based on existing knowledge focused on producing new products, materials, services, systems and processes.

Srivastava (2001): 1 . 2 . 3 . 4 . 5 .

 12345 Acquisition: Knowledge can be acquired by buying, leasing and renting from individuals or organizations; Dedicated Resource: Forming R&D units within a company and transferring R&D results; Fusion: Developing new synergies by bringing new people with different perspective to work together in the same place; Adaptation: Using the existing internal resources in new ways; Knowledge Networking: Formal and informal networking.

Figure 28 :

 28 Figure 28: Relating Knowledge Management and Intellectual Capital (Stainfield, 1998)

  On the other side, based on the IAS 38 in the development phase, there are six main conditions that should be met if a company wants to capitalize and include an intangible asset inside the balance sheet(IAS Standard 38 -Intangible Assets, 2001):I)Technical feasibility of completing intangible assets, so that they will be ready for use or sale; II) Intention to complete intangible assets for use or sale; III) Ability to use or sell intangible assets; IV) Possibility to generate future economic benefits based on the existence of market demand; V) Availability of adequate technical, financial and other resources to complete the development of intangible assets; VI) Ability for precise measurement of all expenditures attributable to that intangible asset.

  . . . . . . . . . . . . . . . . . . . . . . . .. . .. .. . . . . . . . . . . . . . . . . . . .. . .Intellectual capital is a vital and crucial component of each company necessary for maintaining a competitive advantage as a valuable resource for value and wealth creation. The importance of intellectual capital is in measuring, utilizing and recognizing the potential benefits that can stem from intellectual capital in the future years. The possibility not to imitate these competencies and capabilities allow a company to be strategically more important.

  After deep understanding of our problem, the study presents research methodology, or more precisely put, the research tools that are used in the whole quantitative research work. The research methodology answers the following question: "How has the work been done?". Defined research methodology enables us to conceptualize our research design in the form of conceptual framework. Conceptual framework is important because it illustrates what the whole research work process looks like, starting from the inputs and transformation process, up to final outcomes. After conceptualizing my work, justification of variables is done. It is of high importance to justify and prove every used variable with existing and well-known articles since this is necessary for the research study to be credible. The research problem and theoretical gap result in the main research question that further results in presenting a sub-research question. The research questions definitely further guide the whole thesis in the planned way. The research process plan is the crucial part of this chapter because it explains how to resolve the observed problem. How is it possible to implement this research project in every other project, not only theoretically, but also professionally and practically. Three main research theories used in this study are explained based on the research objectives and research hypotheses. Research theories are of high importance because they show a reader the approach to the whole problem. Research theories do not change theoretical basis. They just observe the selected phenomena and provide constant observations. Finally, the research models coupled with the Intellectual Capital Value Transformation model are presented. The Intellectual Capital Value Transformation model is the main model used in my work.

): 1 .

 1 To obtain new insights about the phenomenon (exploratory or formulated research studies); 2. To gain portray about the characteristics of an individual, situation or group (descriptive research studies); 3. To determine the frequency of something that can be associated with something else (diagnostic research studies); 4. To test a proposed hypothesis of a causal relationship between given variables (hypothesis-testing research studies);

  [START_REF] Saunders | Research Methods for Business Students[END_REF] defined the research methodology as the theory of how research should be taken. On the other side, research methods refer to all techniques and procedures used to obtain and analyze data. The same author explained the key characteristics of one research, and those are: data are collected and interpreted systematically, and there is a clear goal of research.

3 .

 3 Figure 29: My Research Process Plan

Figure 31 :

 31 Figure 31: Simplified Conceptual Framework

7 )

 7 the classification of industries, useful life of assets and capitalization requirements; Statistical operations and correlations; 8) Explanation of empirical results and final conclusions.

  The second step is related to identifying the research gap. Identifying the research gap is the hardest part of the job because it requires not only hard work, but also creativity to propose a completely new contribution to the management science. It is necessary to have good and deep understanding of the existing literature and to propose its own unique topic. Even the slightest suggestion for improvement can bring benefits and contributions to the science. The proposed topic of this study can contribute greatly by determining the relation between investments in intellectual capital and company performance seen in the form of total book value. The third step is about the creation of a plan for proving the thesis. It is very important to propose adequate variables and correlations that will further produce expected results. The research plan stems from the existing literature and identified research gap. This is the part which conceptualizes the whole work in one process and brings the value creation process to the end. The fourth step determines the research methodology. The research methodology presents the ways and tools of the whole research process. How is the work done? How is it finished? These are some of the questions that are answered in this part. The whole research methodology part is very carefully developed and created in order to present how the work was implemented to all potential readers of this thesis. Determining and proposing the research models is in the center of the research methodology. First of all, which model from the theory is used and second, how is the research conceptualized. The proposed research models structure and conceptualize the whole work into one. The fifth step is the most important part of every research work. Researchers often propose very interesting topics based on the literature, but they do not confirm feasibility, possibility to collect empirical information and to prove the results in the end. This study had first been confirmed empirically before the whole research work started. This confirmation allowed me to proceed with the development of the whole work and made me more confident in the given research. The collection of financial information was the toughest part of the job even in this study. The access to financial databases was very limited, expensive and unsecure. Even though it is possible to find planned financial information in the official annual reports, financial database that could supply me with the same information was necessary for this study. And here is the biggest problem. After many unsuccessful attempts, I was granted the access to the financial database "Point Risk" from the IAE of Paris, Sorbonne Business School. The "Point Risk" database is composed only of French companies. This database is sufficient for my research because it possesses all the necessary financial information observed by the research models. The collection is composed of information from 2008 until 2016 and it includes 8 main variables. Those are: -Total Book Value; -Total Non-Current Assets Value; -Total Intangible Assets Value;

  [START_REF] Molodchik | Intellectual Capital Transformation Evaluating Model[END_REF] presented potential internal and external factors in the intellectual capital transformation process:

I collected 1 ,

 1 990 French companies for my sample by using the French financial database "Point Risk". I obtained the access to the financial databases from the Faculty IAE of Paris, University Paris 1 -Pantheon Sorbonne during my work as a Research Assistant in the period from October 2017 until June 2018. I collected complete financial statements for each company for the period from 2008 until 2016, so 9 business years in total. I observed main eight variables from the collected data. The first collection had 1,990 companies, but this number was reduced because of the missing information necessary to meet pre-planned criteria for my thesis.

  Technology and Low Technology industries is 50.415 % and 49.585 %. 6 companies were excluded from the Low Technology industry -Construction -Special Trade because my sample has only financial information for the last 9 years. In order to include this industry, financial information for the last 20 years is necessary. One company was excluded from the High Technology -Electrical Lighting and Wiring Equipment industry because financial information for the last 25 years is necessary in order to include this industry, and it was possible to follow only the last 9 year based on my sample. The largest investments in R&D are found in High Technology -Electronic Components, Semiconductors, High Technology -Computer programming, Software, Data Processing, High Technology -Communication Equipment and High Technology -Telephone Communication. The conclusion is that the largest investments in R&D are found mostly in the High Technology industries' companies.

  Figure 34: Average Total Book Value of companies ordered from highest to lowest in the period 2008 -2016

Figure 37 :

 37 Figure 37: Movement of dependent variables

Figure 42 :Figure 44 :

 4244 Figure 42: Average Research Assets Value of companies ordered from highest to lowest in the period 2008 -2016

5. 4

 4 CONTRIBUTION TO SCIENCE .......................................................................................... 5.5 PRACTICAL APPLICABILITY ........................................................................................... 5.6 RECOMMENDATION FOR FURTHER RESEARCH ............................................................... 5.7 SUMMARY .....................................................................................................................

  The third group of methods analyzes financial statement data. The analysis of a certain financial position treated as indicators of intellectual capital enables estimating the size and efficiency of exploitation of intangible assets. The final group of methods are scorecard methods by means of which it is only possible to visually follow the changes of intangible indicators.

  adequately. All the data was collected from the financial databases "Point Risk" obtained from the Faculty IAE Paris, University Paris 1 Pantheon Sorbonne, during my work as the Research Assistant on the research project. Two main research hypotheses are tested in this work.The first research hypothesis shows that it is possible to invest in all components of intellectual capital and to expect those investments to have a positive influence, or more precisely put, to expect those investments to develop and capitalize new assets within a company. It is possible to expect positive results only by investing in all components at the same time. Produced results

Figure 1 : 25 Figure 2 :Figure 3 :Figure 4 :Figure 5 :Figure 6 :Figure 7 :Figure 8 :Figure 9 : 80 Figure 12 :Figure 14 :Figure 15 :Figure 17 :Figure 18 :Figure 19 : 98 Figure 21 :Figure 23 :Figure 24 :Figure 25 :Figure 26 :Figure 27 :Figure 28 :Figure 32 :Figure 34 :Figure 35 :Figure 36 :Figure 37 :Figure 38 :Figure 43 :Figure 46 :Figure 47 :

 12523456789801214151718199821232425262728323435363738434647 Figure 1: Intangible assets calculation. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25 Figure 2: Intangible assets classification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36 Figure 3: Conceptual Roots of intellectual capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Figure 4: Intellectual capital pathway. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Figure 5: Two Components of intellectual capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Figure 6: Intellectual Assets Focus Areas. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Figure 7: Skandia Navigator. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54 Figure 8: Sveiby's model of intellectual capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Figure 9: Subcomponents of structural capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61 Figure 10: Technology Broker the components of intellectual capital. . . . . . . . . . . . . . . . . . .69 Figure 11: Balanced Scorecard concept. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 Figure 12: Intellectual capital index and the internal flow of intellectual capital. . . . . . . . . . .81 Figure 13: Intangible Asset Monitor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82 Figure 14: Skandia Navigator. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83 Figure 15: Principles of implementation of Tableau de Bord. . . . . . . . . . . . . . . . . . . . . . . . . .84 Figure 16: Knowledge Assets Map. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85 Figure 17: Elements of intellectual capital statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88 Figure 18: Concepts related to the intellectual capital investments potential outputs. . . . . . . 93 Figure 19: Possible components of investments in intangible capital. . . . . . . . . . . . . . . . . . . 97 Figure 20: Intellectual capital investments classification. . . . . . . . . . . . . . . . . . . . . . . . . . . . .98 Figure 21: Possible complementary assets produced from the investments in R&D. . . . . . .105 Figure 22: Framework for intellectual capital transformational model. . . . . . . . . . . . . . . . . 114 Figure 23: Intellectual capital transformational scheme. . . . . . . . . . . . . . . . . . . . . . . . . . . . .114 Figure 24: Types of knowledge. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 Figure 25: Knowledge processes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 Figure 26: Knowledge management in organizations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 Figure 27: Intellectual capital management and knowledge management selected characteristics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 Figure 28: Relating knowledge management and intellectual capital. . . . . . . . . . . . . . . . . . 136 Figure 29: Research Process Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .156 Figure 30: Conceptual Framework. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .164 Figure 31: Simplified Conceptual Framework. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165

Figure 48 :Figure 49 :Figure 50 :

 484950 Figure 48: Histogram of Costs of Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214 Figure 49: Histogram of Personnel costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215 Figure 50: Histogram of Total Intangible Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Figure 51 :Figure 52 :

 5152 Figure 51: Histogram of Total Non-Current Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .216 Figure 52: Histogram of Total Book Value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216

Table 2 :

 2

  Table of intangible assets definitions

	AUTHORS	INTANGIBLE ASSETS DEFINITIONS
	Hall (1992)	Intangible assets represent a generator of advantage that
		transforms productive resources into property with added
		value.

Table 3 :

 3 Intangible assets considered in terms of useful life cycle

		(Vaughan, 2009)
	Ascertainable Useful Life	Unascertainable Useful Life (Goodwill)
	Patents	Copyrights
	Patent applications	Trademarks and brands
	Franchises	Technical "know-how"
	License agreements	Personnel
	Noncompetition agreements	Market acceptance
	Royalty agreements	Established location
	Employment contracts	Secret processes and formulas
	Purchase contracts
	Lease agreements
	Design rights
	Technical libraries
	Pending contracts

  4. Contract-related intangible assets represent the value of contractual arrangements and rights. Examples include franchises and licensing agreements, construction permits,

	broadcast rights and supply contracts;
	5. Technology-related intangible assets are related to innovation and technological
	advances. Examples of this type of intangible assets are patented technology and trade
	secrets.

Table 4 :

 4 Table of intellectual capital definitions

	AUTHORS	INTELLECTUAL CAPITAL DEFINITIONS
	Galbraith (1969)	Intellectual capital is the difference between a company's
		market and book value.

3 )

 3 Employees with the most intellectual capital work voluntarily, whereas the best employees find job opportunities in many different places. Volunteers do not work because of financial reasons, whereas other best employees do, and they can leave a Employees with the highest intellect are mostly the ones who are less appreciated;

	company easily;
	4) Managers do not pay a lot of attention to intellectual capital. They ignore or depreciate
	intellectual capital;
	5)

Table 5 :

 5 Customer Capital Elements[START_REF] Knight | Performance Measures For Increasing Intellectual Capital[END_REF]

	Customer Capital Elements	Theme
	Supplier Capital	The mutual trust, commitment, and creativity of key suppliers
	Alliance Capital	Reliable and beneficial partners
	Community Capital	An organization's capabilities and reputation in its surrounding
		community
	Regulatory Capital	Knowledge of laws and regulations as well as lobbying skills and
		contacts
	Competitor Capital	Critical understanding and intelligence about competitors

From the

Table 5

above, there are five main customer capital elements, and those are: supplier capital, alliance capital, community capital, regulatory capital and competitor capital. Supplier capital represents all mutual trust, commitments and creativity of key suppliers. Alliance capital is related to all reliable and beneficial partners. Community capital stands for company's capabilities and reputation in its surrounding community and environment. Regulatory capital includes knowledge of laws and regulations as well as lobbying skills, contacts and networks.

Table 6 :

 6 Strengths and Weaknesses overview of intellectual capital measurement methods[START_REF] Gogan | An Innovative Model for Measuring Intellectual Capital[END_REF]

	Method	Type	Strengths	Weaknesses
			Allows separate	This method is specific
			measuring of the	for a particular category
			components of IC.	of organizations, and
			Provides a	the comparison is
	DIC	Monetary	comprehensive picture	difficult. Not
			of an organization's	appropriate for
			intellectual wealth.	benchmarking or
			Measurements are based	comparisons. Limited
			on events	number of components.
			Allows comparison of	It is not suitable for an
			organizations in a	overview of the
			particular field.	development. A purely
	MCM	Monetary	Provides a monetary value of intellectual	economic focus limits the perspective.
			capital. Appropriate for
			benchmarking and
			comparisons.
			Appropriate for	It is characterized by a
			benchmarking and	lack of information
			comparisons. The	constituting IC. A
			method is suitable for	purely economic focus
	ROA	Monetary	comparing different	limits the perspective.
			organizations in the
			same sector. It is based
			on traditional
			accounting rules.
			Provides a more	Sensitive to the changes
			comprehensive	of the context. The
			examination of	amount of resulting
	SC	Non-Monetary	intellectual capital and performance than	information may be hard to analyze; it is
			methods based on	difficult to obtain a
			monetary measurement	numeric result.
			do.

Table 7 :

 7 Table of definitions of intellectual capital investments Figure 18 above, there are seven main intellectual capital investments potential outputs that can come from intellectual capital investments, and those are knowledge-based economics, profit, innovation, competitiveness, economic growth, enterprise value and productivity

	Authors	The interpretations of the definition of intellectual capital investments
	Andriessen and Stam (2005) Values of intellectual capital are used as the intellectual
		capital future perspectives that will give insight into the future
		power of a company.
	Awano et al. (2010)	Investments in intellectual capital are defined as expenditures
		for software, training, reputations, R&D, design and brand,
		and business process improvement.
	Bandeira and Afonso (2010) R&D expenditures are used as synonyms for intangible
		capital investments.
	Canibano et al. (2000)	Investments in intellectual capital are seen as intangible
		activities. They are simply allocation of resources focused on:
		1) Acquiring new or developing internally intangible
		resources;
		2) Increasing the value;
		3) Monitoring and evaluating the results of the previous
		two steps;
	Corrado et al. (2006)	Expenditures related to economic competencies, innovative
		property and software are all used as intellectual capital
		investments.
	Corrado et al. (2012)	Intellectual capital investments are defined as intangible
		activities for a strategic goal in a company.
	Hall et al. (1986)	Strategic expenditures must be seen as investments in
		strategic assets.
	Klock and Megna (2000)	Advertising expenditures represent measurement for the
		intellectual capital investments.
	Piekkola (2011)	Intellectual capital investments are company's capital
		formation expenditures.
	RICARDIS project (2006)	Investments in intellectual capital or innovative expenditures
		consist of internal and external R&D expenditures,
		acquisition of machinery, training and license.

-Social and collective character; -Lifespan of intellectual capital investment depends on its diverse use; -Recovering of intellectual capital investment is shorter than the material investment; -Effects of investments in intellectual capital are multiple.

Figure

18

: Concepts related to the intellectual capital investments potential outputs

(Lentjushenkova and Lapina, 2014)

  Investments in Human capital generate improvements in the future company's market value. García-Zambrano et al. (2018) took expenditures on training as the main indicator of investments in Human capital.

	2.1.3.4 Investments in Structural Capital (SC)
	Bandeira and Afonso (2010) think that market treats R&D expenses as investments in
	intellectual capital, more precisely in structural capital.
	As mentioned in the part 2.1.2.2.2 Structural capital given by Martín-de-Castro et al. (2011), is
	composed of Technological and Organizational Capital.

-Zambrano et al. (2018) took Spanish companies as a sample in their study. They are quoted on the IBEX-35 stock exchange and they compared investments in Human capital and Tobin's Q ratio. A positive relationship between investments in Human capital and Tobin's Q ratio was proven.

Table 8 :

 8 Table of Types of expenditures and accounting treatments of research and development expense[START_REF] Warfield | Intermediate Accounting: Principles and Analysis[END_REF]

	Type of Expenditure	Accounting Treatment
	1. Construction of long-range research facility for the use on	Capitalize and depreciate as
	current or future project.	R&D expense
	2. Acquisition of R&D equipment for the use on current	Expense recorded immediately
	project only.	as R&D.

3.5 Investments in Customer (Relational) Capital According

  The cost of purchasing a land or buildings belongs to the group of capital expenses. Capital expenses can create an asset and affect a company's capital. Taking into account everything previously mentioned, investments in land, plant, research and development, training, software, marketing must be treated as capital expenses. The core of interest is the capitalization and recognition of these capital expenses inside the balance sheet of a company that will generate benefits for the future. The main question is related to the results and effects of an investment in research and toChen et al. (2005[START_REF] Miles | Análisis Del Capital Intelectual de Las Pequeñas y Medianas Empresas Uruguayas y Su Impacto En Los Resultados[END_REF] stated that investments in Relational capital have the highest impact on business results. Studies by[START_REF] Corrado | Intangible Capital and Economic Growth[END_REF],Cohen and Kaimenakis

development. In order to capitalized R&D expenses, it is necessary to accumulate all R&D expenses and to create a research asset. A company's equity and assets increase together with the development of the research asset. The number of years necessary to develop one research 2.1.

  measured investments in intellectual capital by collecting all expenses in R&D, software, advertising and marketing, wages and salaries of employees. He obtained the results that trillions of dollars were invested in the US, with intellectual capital in the amount of 5 trillion dollars.[START_REF] Corrado | Intangible Capital and Economic Growth[END_REF] New product development in financial industry and new architectural and engineering designs are organized in 20 % and 50 % respectively regarding all the purchases by Finance industry and sales of architectural and consulting engineering services;

	• Economic competencies: advertising is advertising expenditure; market research is
	available from sales of market research services; human capital represents all direct
	costs and wage costs of employees in training; organizational capital is 80 % and 20 %
	respectively regarding sales of management consulting services and salaries of
	managers and administrators;
	Schreyer (2007) proved that the concept of Corrado et al. (2005) is more practical than regular
	expanded Nakamura's work (2001, 1999) and gave measurement indicators for the
	previous study by Corrado et al. (2005):
	• Computerized information: Investments in computer software and computer
	databases available in national accounts;

• Innovative property: Scientific R&D and Social sciences R&D are expenditures on R&D; mineral exploration is the investment in mineral exploration available in national accounts; copyright and license costs are investments available in national accounts; measurement of a company's intangible assets. Regarding measurement, it is doubtful whether measurement should be expenditure-based or value-based (

  a company wants to have a recognized and capitalized developed intangible asset, it must have substantial research and development expenses accepted by International Accounting Standard (IAS) 38 to create an intangible. Based on the IAS 38 in the development phase, there are six main conditions that should be met if a company wants to capitalize and include an intangible asset inside the balance sheet (IAS Standard 38 -Intangible Assets, 2001):

	I)	Technical feasibility of building intangible assets, so that it will be ready for usage
		or sales;
	II)	Intention to build intangible assets for usage or sales;
	III)	Ability to use or sell intangible assets;
	IV)	Possibility to generate future economic benefits based on the existence of market
		demand;
	V)	Availability of adequate technical, financial and other resources to complete the
		development of intangible assets;
	VI)

Table 10 :

 10 Table of transformational factors and indicators by[START_REF] Molodchik | Intellectual Capital Transformation Evaluating Model[END_REF]

	Transformational Factors	ICTEM Indicators
		Company age
	Internal Factors	Company size
		Global market orientation
		Industry
		Country
	External Factors	Developed market Sub-indexes of Knowledge Economy
		Location in the state (or region) capital
		Location in a megapolis

Table 10

 10 presents the main external and internal factors that are observed and included in the transformation process and that will result in producing intellectual capital outcomes explained earlier. Internal factors include company's size, company's age and global market orientation.

External factors include industry they belong to, country where they are headquartered, level of market development, sub-indexes of knowledge economy, location in the state of capital and location in a megapolis

[START_REF] Molodchik | Intellectual Capital Transformation Evaluating Model[END_REF]

.

Table 11

 11

below is composed of definitions, examples of indicators and ICTEM Input Indicators based on the work of Molodchik et al. (2012):

Table 11 :

 11 Table of components in ICTEM Model by[START_REF] Molodchik | Intellectual Capital Transformation Evaluating Model[END_REF]

	Components	Definition	Example of Indicators	ICTEM Input Indicators
			Revenue generated
		What a particular	per employee,
		employee brings into	training spent per	Share of wages in costs,
	Human Capital	the value creation	employee, value	costs of employees,
		process in a	added per employee,	earnings per employee
		company?	new ideas generated
			by staff.
	Structural Capital	How good are the relations between the people in a company, how well are they related and what remains when all employees go home?	Income per R&D expense, number of patents, individual links to database, number of new products.	R&D investment, intangible assets, patents, licenses, trademarks, ERP systems implementation, stable turnover growth

Table 11

 11 presents and explains the meanings of intellectual capital transformation model indicators. There are three main components of intellectual capital observed here as well, and those are: human capital, structural capital and relational capital. Examples of human capital are different revenues generated per employee, training spent per employee and new ideas generated by staff. Examples for structural capital are incomes coming from the R&D expenses, number of patents and number of new products. Examples of relational capital are growth in sales, revenue per customer and reputation of a company. At the end of the

Table 3

 3

, there are precise indicators for each type of intellectual capital component

2 Investments in Intellectual Capital and Company performance

  on the work of ICMGroup, Inc. (1998) dealing with what companies measure with respect to intellectual capital, the following indicators were found in the section of "ValueLentjushenkova and Lapina (2014) explored the influence of investments on intellectual capital and company performance. The core of intellectual capital is human capital because it influences other components of intellectual capital and stimulates transformation of intellectual capital. The results of the study were: positive changes in profit and productivity.

	123
	-Lost business revenues compared to market average;
	-Market Value;
	-Return on Net Assets Value;
	-Return on Net Asset resulting from new business operations;
	-Value added/Employee;
	-Value added/IT employees;
	-Investments in IT;
	-Value added/Customer.
	2.1.4.
	Extraction":
	-Profits;
	-Return on Net Assets value;
	-Total Assets;
	-Revenues resulting from new business operations;
	-Market Value;
	-Patents pending;
	-Return on Nets Assets resulting from new business operations.
	Edvinsson and Malone (1997) together published the "Universal Intellectual Capital Report"
	with a major set of intellectual capital measures. The key metrics of financial focus are:
	-Total Assets;
	-Total Assets/Employee;
	-Revenues/Total Assets;
	-Profits/Total Assets;
	-Revenues resulting from new business operations;
	-Revenues/Employee;
	-Customer time/Employee Attendance;
	-Profits/Employee;

  chapter discusses the meaning of intellectual capital in terms of different definitions,

	classifications, existing measurement methods, investments indicators, relations with
	knowledge management systems and performance measurement systems. It has been concluded
	that there is not a unique definition of intellectual capital and investment in intellectual capital
	which can explain the term more elaborately. However, definitions by different authors reveal
	that intellectual capital has intangibility components and forms and that it is a source of value
	creation, and that it can enhance value creation when combined with other organizational
	resources. The analysis of classification of intellectual capital and investments in intellectual
	capital done by many different authors shows that intellectual capital is composed of three main

categories of assets, namely: human capital, organizational or structural capital, and relational or customer capital. Human capital consists of all employees' skills, education, experience, attitudes, and efficiency that is seen as rented capital of an organization. Organizational or structural capital provides supportive organizational systems, processes, procedures, research and development activities, software. Relational or customer capital maintains organizational relationship with all company's stakeholders. The three explained categories of intellectual capital are interrelated and human capital transforms into structural capital and relational capital during the value creation process.

  Company performance is not only influenced by intellectual capital investments performances, but also by some factors at both organizational and industrial level. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . .9 RESEARCH PROCESS PLAN ............................................................................................. 3.10 RESEARCH HYPOTHESES ............................................................................................. 3.11 RESEARCH THEORIES ..................................................................................................

	CHAPTER III
	RESEARCH METHODOLOGY

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SUMMARY: CHAPTER III -RESEARCH METHODOLOGY ................................................................ 3.1 CONCEPTUAL DEVELOPMENT ........................................................................................ 3.2 BACKGROUND OF RESEARCH PROBLEM ........................................................................ 3.3 THEORETICAL GAP ........................................................................................................ 3.4 RESEARCH AIM AND OBJECTIVES .................................................................................. 3.5 DETERMINATION OF RESEARCH METHODOLOGY .......................................................... 3.6 CONCEPTUAL FRAMEWORK ........................................................................................... 3.7 JUSTIFICATION OF STUDY .............................................................................................. 3.8 RESEARCH QUESTIONS ..................................................................................................

3

  RESEARCH MODEL ......................................................................................................

3.13 SUMMARY ...................................................................................................................

  The existing papers are explored in the thesis above in the part 2.2.4 Relation between Intellectual capital and Performance. The main theoretical gap lies in the part of intellectual capital and total book value. Furthermore, the literature gap is in the part of investing in intellectual capital and total book value. There are different articles, papers and work that are highly close and similar to this research work, but not the same. The Ph.D. thesis proposes a contribution to the existing literature review. The theoretical part related to investments in intellectual capital has not been explored enough until

Table 14 :

 14 Depreciation rates for asset types in France[START_REF] Helmer | Worldwide Capital and Fixed Assets Guide[END_REF]

	Asset type	Useful life for tax	Type of tax depreciation method	Applicable tax depreciation rate
	Plan, machinery and equipment	Between 6 and 10 years	Straight-line basis	Between 10 % and 15 %
	Motor cars	Between 4 and 5 years	Straight-line basis	Between 20 % and 25 %
	Industrial buildings	20 years	Straight-line basis	5 %
	Furniture	10 years	Straight-line basis	10 %
	Computer hardware	3 years	Straight-line basis	33.33 %
	Computer software	2 years	Straight-line basis	50 %
	Office building	25 years	Straight-line basis	4 %
	Transport other than motor cars	Between 4 and 5 years	Straight-line basis	Between 20 % and 25 %
	Tools/equipment	Between 5 and 10 years	Straight-line basis	Between 10 % and 20 %
	Office equipment (including office furniture and fixtures)	Between 5 and 10 years	Straight-line basis	Between 10 % and 20 %
	Property used in R&D	5 years	Straight-line basis	20 %

Table 15 :

 15 Table of classification of industries by[START_REF] Francis | Have Financial Statements Lost Their Relevance?[END_REF]

	High-Technology Industries
	Drugs
	Computer and Office Equipment
	Electrical Machinery and Equipment, Excluding Computers
	Electrical Transmissions and Distribution Equipment
	Electrical Industrial Apparatus
	Household Appliances
	Electrical Lighting and Wiring Equipment
	Household Audio, Video Equipment, Audio Receiving
	Communication Equipment
	Electronic Components, Semiconductors
	Computer Hardware (Including Mini, Micro, Mainframes, Terminals, Discs, Tape
	Drives, Scanners, Graphics Systems, Peripherals and Equipment)
	Telephone Communications
	Computer Programming, Software, Data Processing
	Research, Development, Testing Services
	Low-Technology Industries
	Agricultural Products -Livestock
	Heavy Construction, Excluding Building
	Construction -Special Trade
	Dairy Products
	Textile Mill Products
	Lumber and Wood Products, Excluding Furniture
	Wood Buildings, Mobile Homes
	Paper and Allied Products
	Rubber and Miscellaneous Plastics Products
	Miscellaneous Plastics Products
	Cement Hydraulic
	Blast Furnaces and Steel Works
	General Industrial Machinery and Equipment
	Motor Vehicles and Motor Vehicle Equipment
	Miscellaneous Manufacturing Industries
	Railroads
	Trucking, Courier Services, Excluding Air
	Water Transportation
	Scheduled Air Transportation, Air Courier
	Grocery Stores

Table 16 :

 16 Table of calculation of research asset byDamodaran (2009)

	Year	R&D	Unamortized Portion	Unamortized Value
	1988	$ 751	0.10	$ 75
	1989	$ 754	0.20	$ 151
	1990	$ 827	0.30	$ 248
	1991	$ 1,417	0.40	$ 567
	1992	$ 1,846	0.50	$ 923
	1993	$ 1,661	0.60	$ 997
	1994	$ 1,704	0.70	$ 1,193
	1995	$ 1,300	0.80	$ 1,040
	1996	$ 1,633	0.90	$ 1,470
	1997	$ 1,924	1.00	$ 1,924
	Capitalized Value of R&D Expenses	$ 8,587

Table 17 :

 17 Table of transformational factors and indicators by[START_REF] Molodchik | Intellectual Capital Transformation Evaluating Model[END_REF]

	Transformational Factors	ICTEM Indicators
		Company age
	Internal Factors	Company size
		Global market orientation
		Industry
		Country
	External Factors	Developed market Sub-indexes of Knowledge Economy
		Location in the state (or region) capital
		Location in a megapolis
	Based on the Table 17, the intellectual capital transformation model indicators that will be
	considered are industry related to the external factors and country. None of internal factors will
	be examined.

Table 18

 18 below is composed of definitions, example of indicators and ICTEM Input Indicators based on the work of Molodchik et al. (2012):

Table 18 :

 18 Table of components in ICTEM Model by[START_REF] Molodchik | Intellectual Capital Transformation Evaluating Model[END_REF]

	Components	Definition	Example of Indicators	ICTEM Input Indicators
			Revenue generated
		What a particular	per employee,
		employee brings into	training spent per	Share of wages in costs,
	Human Capital	the value creation	employee, value	cost of employee, earnings
		process in a	added per employee,	per employee
		company?	new ideas generated
			by staff.
	Structural Capital	How good are the relations between the people in a company, how well are they related and what remains when all employees go home?	Income per R&D expense, number of patents, individual links to database, number of new products.	R&D investment, intangible assets, patents, licenses, trademarks, ERP systems implementation, stable turnover growth
			Growth in sales,	Commercial expenses share,
		The company's	revenues per	well-known brand, foreign
	Relational Capital	relations with its	customer, brand	capital employed,
		stakeholders.	loyalty, reputation of	participation in business
			a company.	associations

  enable achieving and finalizing research work successfully. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CHAPTER IV -EMPIRICAL RESEARCH ......................................................................... 4.1DATA SAMPLE DESCRIPTION .......................................................................................... 4.1.1 Analyses of Data Sample ...................................................................................... 4.1.2 Data Sample Description for Research Models I and II ....................................... 4.1.3 Justification of Variables ...................................................................................... 4.1.4 Movement and Trends of Variables ...................................................................... 4.2DESCRIPTIVE STATISTICS ............................................................................................... 4.3 PEARSON CORRELATIONS .............................................................................................. 4.4 COMPLEX REGRESSION ANALYSES ................................................................................ 4.5 DISCUSSION ABOUT FINDINGS ....................................................................................... 4.6 SUMMARY .....................................................................................................................

	CHAPTER IV
	EMPIRICAL RESEARCH
	SUMMARY:

Table 19 :

 19 Number of companies included in the first research modelAs we can conclude from the sample, the largest number of companies are from the Low None of the companies is excluded because they all meet the requirements regarding the necessary useful life of assets.

	Technology Industry -Miscellaneous Manufacturing Industries -89, followed by those from High Technology, listed chronologically, Computer Programming, Software, Data Processing, Research, Development, Testing Services, Drugs and Electrical Apparatus, 81, 44, 38 and 35. In total, there are 241 companies that belong to the High Technology industries, and 257 companies that belong to the Low Technology industries. The percentage between the High 1,990 Missing Data Companies 1,195 Technology and Low Technology is 48 % and 52 %. Starting Number, Observed Repeating Companies 297

Final Number of Companies 498 NUMBER OF COMPANIES

Table 20 :

 20 Number of companies per industry in the first research model

	Research Model II

Table 21 :

 21 Number of companies included in the second research model

	Industry	Number of Companies	Amortizable Life of Assets (Number of Years)
	Low Technology -Miscellaneous Manufacturing Industries

Table 22 :

 22 Number of companies per industry in the second research model

	Industry	Number of Companies

Amortizable Life of Assets (Number of Years) High Technology -Computer Programming, Software, Data Processing 2 years

Table 23 :

 23 Justification of variables

  Table 23 above, we can list the following dependent and independent variables justification. It is highly important to justify the proposed variables using the existing and wellknown literature. The credibility and validity of the whole study is questionable without that. I started with the dependent variables first. Total Book Value is confirmed by the main already published authors. The proposition of the last two dependent variables are from the authors, and those are Total Non-Current Assets Value and Total Intangible Assets Value. The last two dependent variables are taken in order to see how and where the value is developed. It is important to see whether we have capitalization of tangible or intangible assets value after investing in intellectual capital component. Are tangible or intangible assets created?

  The company Schneider Electric Industries SAS has the highest value of total book value.

	€ 2,860,000,000.00
	€ 286,000,000.00
	€ 28,600,000.00
	€ 2,860,000.00
	€ 286,000.00
	0	100	200	300	400	500	600

TBV

Total Non-Current Assets variable movement Figure 35: Average Total Non-Current Assets Value of companies ordered from highest to lowest in the period 2008 -2016

  Personnel Costs, Research and Development Expenses, Commercial Expenses and Costs of Sales. Personnel Costs include all salaries, treatments and social charges. Research and Development Expenses are all expenses related to research and development activities. Commercial Expenses are all expenses related to commercial activities. Costs of Sales are all costs related to sales of goods or services to the clients. Movements and trends of each dependent variable are presented in the Figures below in order to show their fluctuations and changes. The values represent an average and range from the lowest up to the largest. The observed period is from 2008 until 2016.The given values can be found in the official annual report, in the profit and loss account part. This is an indicator that the sample is highly diversified and heterogenous and is composed of small, medium and large French companies. The company that invests the highest amounts in the personnel costs is CEGID. Personnel costs are closely related to the human capital component of intellectual capital.

	Personnel Costs variable movement
	Personnel Costs
	€ 755,000,000.00
	€ 75,500,000.00
	€ 7,550,000.00
	€ 755,000.00
	€ 75,500.00
	Figure 38: Average Personnel Costs Value of companies ordered from highest to lowest in the period 2008 -2016 Observing the Figure 38, we can conclude that values start at €7,555 and finish at €1,019,128,000. € 7,550.00 0 100 200 300 400 500 600

R&D expenses variable movement

Figure 39: Average Research and Development (R&D) Expenses Value of companies ordered from highest to lowest in the period 2008 -2016

Table 24 :

 24 Descriptive statistics

		Research Asset Value	Research and Development Expenses	Commercial Fond (Expenses)	Costs of Sales (Expenses)	Personnel Costs (Salaries and Traitments + Sociales Charges)	Total Intangible Assets	Total Non-Current Assets (mora da bude vece od TIA)	Total Book Value
	Valid	475	498	498	498	498	498	498	498
	Missi	23	-	-	-	-	-	-	-
	ng	20,566,069	3,693,153	6,289,476	29,469,536	16,361,130	18,211,491	84,546,702	118,432,756
		8,706,028	1,380,616	2,017,923	11,034,138	3,044,223	6,067,000	41,005,508	46,922,327
		2,006,000	370,500	224,000	2,271,000	2,416,056	1,559,000	3,635,500	9,016,500
		85,440	16000a	8,000	3,047,000	795,000	327000a	353000a	16,890,000
		189,743,489	30,809,718	45,031,785	246,236,861	67,934,611	135,390,637	915,075,382	1,047,114,585

Error of Kurtosis Range Minimum Maximum Sum Median Mode Std. Deviation Variance Ske wne ss Std. Error of Skewness N Mean Std. Error of Mean Deviation

  is 1,047E8. The whole distribution is positive, and it is around the center, not less than zero. What is important to understand is that the number of extreme values does not influence the quality of the produced final results.Regarding the sample that is observed in this research, there are big oscillations which are identified mainly because of the large size of the sample and size difference between companies included in the sample. A very important indicator is seen in the parameter test of kurtosis and distribution of data that shows that the data is concentrated around the center of distribution.This parameter has positive values and because of that it is concentrated around the center in the middle. The second very important parameter of asymmetry is skewness. So, the positive values of asymmetry show that if they are positioned to the left of the middle value then it is the matter of positive value, or opposite, if they are more to the right, it is the negative value.

								,000	1,096,448,954,132,360,000
		20	18	14	15	9	18	17	16
		0	0	0	0	0	0	0	0
	Kurtosis	421	346	203	226	114	351	326	278
	Std.	0	0	0	0	0	0	0	0
	4,024,827,560	625,986,000	684,689,000	3,905,918,445	1,019,120,445	2,777,485,000	18,158,096,778	19,727,882,000
		22,110	2,000	1,000	3,555	7,555	35,000	65,222	287,000
	4,024,849,670	625,988,000	684,690,000	3,905,922,000	1,019,128,000	2,777,520,000	18,158,162,000	19,728,169,000
	9,768,882,840	1,839,190,370	3,132,158,944	14,675,828,725	8,147,842,906	9,069,322,598	42,104,257,779	58,979,512,447
	a. Multiple modes exist. The smallest value is shown

  table, the most strengthened relations are found between Research and Development expenses variable and Commercial Fond, Total Intangible Assets, Total Non-Current Assets and Total Book Value. Also, the powerful relation is found between the Commercial Fond and Total Intangible Assets variable.

The weakest correlations are found between Research Asset Value variable and Total Intangible Assets, Total Non-Current Assets Value and Total Book Value variables. Also, the weak relation is found between Commercial Fond Expenses variable and Research Asset Value variable.

Table 25 :

 25 Table of Pearson Correlations

		Resear ch Asset Val ue	Resear ch and Devel opment Expenses	Commer ci al Fond (Expenses)	Costs of Sal es (Expenses)	Personnel Costs (Salaries and Sociales Charges) Tr ai tments +	Total Assets Intangible	Total Non-Cur r ent bude vece od TI A) Assets (mor a da	Total Book Val ue
	Pearson Correlation	1	-.010	-.010	-.007	-.017	-.009	-.007	-.009
	Sig. (2-tailed)		.830	.833	.876	.717	.838	.872	.847
	N	475	475	475	475	475	475	475	475
	Pearson Correlation	-.010	1	,685 **	.027	,540 **	,871 **	,819 **	,780 **
	Sig. (2-tailed)	.830		.000	.555	.000	.000	.000	.000
	N	475	498	498	498	498	498	498	498
	Pearson Correlation	-.010	,685 **	1	,484 **	,545 **	,809 **	,645 **	,641 **
	Sig. (2-tailed)	.833	.000		.000	.000	.000	.000	.000
	N	475	498	498	498	498	498	498	498
	Pearson Correlation	-.007	.027	,484 **	1	,326 **	,207 **	,104 *	,189 **
	Sig. (2-tailed)	.876	.555	.000		.000	.000	.020	.000
	N	475	498	498	498	498	498	498	498
	Pearson Correlation	-.017	,540 **	,545 **	,326 **	1	,492 **	,476 **	,517 **
	Sig. (2-tailed)	.717	.000	.000	.000		.000	.000	.000
	N	475	498	498	498	498	498	498	498
	Pearson Correlation	-.009	,871 **	,809 **	,207 **	,492 **	1	,940 **	,924 **
	Sig. (2-tailed)	.838	.000	.000	.000	.000		.000	.000
	N	475	498	498	498	498	498	498	498
	Pearson Correlation	-.007	,819 **	,645 **	,104 *	,476 **	,940 **	1	,992 **
	Sig. (2-tailed)	.872	.000	.000	.020	.000	.000		0.000
	N	475	498	498	498	498	498	498	498
	Pearson Correlation	-.009	,780 **	,641 **	,189 **	,517 **	,924 **	,992 **	1
	Sig. (2-tailed)	.847	.000	.000	.000	.000	.000	0.000
	N	475	498	498	498	498	498	498	498
	*. Correlation is significant at the 0.05 level (2-tailed).

Costs of Sal es (Expenses) Personnel Costs (Salaries and Tr ai tments + Soci al es Char ges) Total I ntangi bl e Assets Total Non-Cur r ent Assets (mora da bude vece od TIA) Total Book Val ue

	Cor r el
	**. Correlation is significant at the 0.01 level (2-tailed).

ati ons Resear ch Asset Val ue Resear ch and Devel opment Expenses Commer ci al Fond (Expenses)

  First of all, the focus is on the ANOVA part. Model SS has the value of 3.4948e+20 and shows how much our regression explained the study in comparison with the total value which is 5.4494e+20. The percentage of explanation is 64,131831 % precisely, which is over 50 % and represents a very good percentage. The residual value of SS shows how much remains unexplained and that is 35,868169 %. On the right side, we can see the number of observations, which is 498. 498 is the number of companies observed, and this number is already confirmed in the part of data sample description, number of companies in the first research model. R-Squared is the percentage of explanation with my study. Prob > F has the value of 0.0000 which represents the highest precision of the study, without errors. The next step is exploring strength of independent variable coefficients: Research and Development Expenses, Commercial Fond Expense, Costs of Sales and Personnel Costs, Salaries and Social Charges. We will focus on each variable separately. First, Research and Development Expenses variable has a highly positive coefficient of 23.20292. Because t = 15.11 has a higher value than P > | t | = 0.000, then we can definitely conclude that there are relationships between these two variables. The positive link is confirmed. The Research and Development Expenses variables have a standard deviation of 1.535174.First of all, we focus on the ANOVA part. The percentage of explanation is 84.7403488 % precisely, which is over 50 % and represents a very good percentage. We calculated this percentage of explanation when we divided the value of 7.7201e+18 that is Model SS by the total value that is 9.1103e+18. The residual value of SS shows how much is left unexplained and that is 15,2596512 %. On the right side, we can see the number of observations, which is 498. The 498 is the number of companies observed, and this number is already confirmed in the part of data sample description, number of companies in the first research model. R-Squared is the percentage of explanation within my study. Prob > F has the value of 0.0000 which represents the highest precision of the study, without errors.The second step is determining strength of independent variable coefficients: Research and Development Expenses, Commercial Fond Expense, Costs of Sales and Personnel Costs, Salaries and Social Charges. We will focus on each variable respectively: The First of all, the focus is on the ANOVA part. Model SS has the value of 2.8487e+20 and shows how much our regression explained the study in comparison with the total value which is 4.1617e+20. The percentage of explanation is 68.450393 % precisely, which is over 50 % and represents a very good percentage. The residual value of SS shows how much remains unexplained and that is 31.549607 %. On the right side, we can see the number of observations, which is 498. 498 is the number of companies observed, and this number is already confirmed in the part of data sample description, number of companies in the first research model. R-Squared is the percentage of explanation within my study. Prob > F has the value of 0.0000 which represents the highest precision of the study, without errors. The second step is exploring strength of independent variable coefficients: Research and Development Expenses, Commercial Fond Expense, Costs of Sales and Personnel Costs, Salaries and Social Charges. It is important to explore and to see whether we accept coefficients of our proposed variables. between these two variables. The negative link is not confirmed. The Personnel Costs, Salaries and Social Charges variables have a standard deviation of 0.4369482. We can make a conclusion that independent variables Research and Development Expenses, Commercial Fond Expenses, Costs of Sales and Personnel Costs, Salaries and Social Charges extremely positively influence the dependent variable Total Non-Current Assets. Squared is the percentage of explanation within my study. Prob > F has the value of 0.0000 which represents the highest precision of the study, without errors. The next step is exploring strength of coefficients of independent variables: Research Assets Value and Research and Development Expenses. We will focus on each variable separately. First, Research Assets Value variable has a highly positive coefficient 0f 4.800422. Because t = 13.67 has a higher value than P > | t | = 0.000, then we can definitely conclude that there are relationships between these two variables. The positive link is confirmed. The Research Assets Value variable has a standard deviation of 0.3512103. The second independent variable is Research and Development Expenses. Research and Development Expenses variable has a negative coefficient of -3.23883. Because t = -1.55 has a higher value than P > | t | = 0.123, then we can definitely conclude that there are no relationships between these two variables. The positive link is not confirmed. The Research and Development Expenses variable has a standard deviation of 2.095418.

	relationships between these two variables. The positive link is confirmed. The Research Assets
	Value variable has a standard deviation of 0.408504.
	The second independent variable is Research and Development Expenses. Research and
	Development Expenses variable has a negative coefficient of -0.4011961. Because t = -1.65
	has a higher value than P > | t | = 0.100, then we can definitely conclude that there are no
	relationships between these two variables. The positive link is not confirmed. The Research and
	Development Expenses variable has a standard deviation of 0.2437246.
	Based on the produced statistical results, we can conclude that independent variable Research
	Assets Value positively influences the dependent variable Total Intangible Assets Value,
	whereas the independent variable Research and Development Expenses influence it extremely
	negatively.
	Based on the produced statistical results, we can conclude that independent variable Research
	Assets Value extremely positively influences dependent variable Total Non-Current Assets,
	The second independent variable is Commercial Fond Expenses. Commercial Fond Expenses whereas independent variable Research and Development Expenses influence it extremely
	variable has a positive coefficient of 1.95104. Because t = 1.74 has a higher value than P > | t | • The second independent variable is Commercial Fond Expenses. Commercial Fond negatively. Compared to the first research model, the results definitely do not provide certainty
	= 0.083, then we can definitely conclude that there are relationships between these two Expenses variable has a positive coefficient of 1.239213. Because t = 13.08 has a higher The second independent variable is Commercial Fond Expenses. Commercial Fond Expenses and stability.
	variables. The positive link is confirmed. The Commercial Fond Expenses variable has a value than P > | t | = 0.000, then we can definitely conclude that there are relationships variable has a positive coefficient of 2.924488. Because t = 3.18 has a higher value than P > | t
	standard deviation of 1.122955. between these two variables. The positive link is confirmed. The Commercial Fond | = 0.002, then we can definitely conclude that there are relationships between these two
	Expenses variable has a standard deviation of 0.0947082. variables. The positive link is confirmed. The Commercial Fond Expenses variable has a
	The third independent variable is Costs of Sales. Costs of Sales variable has a positive standard deviation of 0.9203696.
	coefficient of 0.4605262. Because t = 2.98 has a higher value than P > | t | = 0.003, then we • The third independent variable is Costs of Sales. Costs of Sales variable has a positive
	can definitely conclude that there are relationships between these two variables. The positive coefficient of 0.0093771. Because t = 0.72 has a higher value than P > | t | = 0.472, then The third independent variable is Costs of Sales. Costs of Sales variable has a positive
	link is confirmed. The Costs of Sales variable has a standard deviation of 0.1543567. we can definitely conclude that there are relationships between these two variables. The coefficient of 0.0502564. Because t = 0.40 has a higher value than P > | t | = 0.691, then we
	positive link is confirmed. The Costs of Sales variable has a standard deviation of can definitely conclude that there are no relationships between these two variables. The positive
	The fourth independent variable is Personnel Costs, Salaries and Social Charges. Personnel 0.0130182. link is not confirmed. The Costs of Sales variable has a standard deviation of 0.1265101.
	Costs, Salaries and Social Charges variable has a positive coefficient of 1.03997. Because t = • The fourth independent variable is Personnel Costs, Salaries and Social Charges.

1.95 has a higher value than P > | t | = 0.052, then we can definitely conclude that there are relationships between these two variables. The positive link is confirmed. The Personnel Costs, Salaries and Social Charges variable has a standard deviation of 0.5331264. • First, Research and Development Expenses variable has a highly positive coefficient of 2.771438. Because t = 21.41 has a higher value than P > | t | = 0.000, then we can definitely conclude that there are relationships between these two variables. The positive link is confirmed. The Research and Development Expenses variables have a standard deviation of 0.129474. Personnel Costs, Salaries and Social Charges variable have a negative coefficient of -0.1579316. Because t = -3.51 has a lower value than P > | t | = 0.000, then we can definitely conclude that there are no relationships between these two variables. First, Research and Development Expenses variable has a highly positive coefficient of 21.29513. Because t = 16.92 has a higher value than P > | t | = 0.000, then we can definitely conclude that there are relationships between these two variables. The positive link is confirmed. The Research and Development Expenses variable has a standard deviation of 1.258222. The fourth independent variable is Personnel Costs, Salaries and Social Charges. Personnel Costs, Salaries and Social Charges variables have a positive coefficient of 0.0814109. Because t = 0.19 has a lower value than P > | t | = 0.852, then we can definitely conclude that there are no relationships

Table 27 :

 27 Statistical Relations between Independent and Dependent Variables in the second

		research model
	Independent Variables / Dependent Variables	Total Book Value	Total Non-Current Assets Value	Total Intangible Assets Value
	Research and
	Development Expenses (Structural Capital	Negative	Negative	Negative
	component)
	Research Asset Value
	(Structural Capital
	component)

Table 27 .

 27 Here, the focus is only on the Research and Development Expenses and Research Asset Value. The Research Asset Value is a value created based on the research and development expenses activities and processes. The main purpose of this table is to see the relationship between financial performance in the form of fixed assets values and investing only in the Relational capital. The results are diverse, half of them are positive, the rest are negative.

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	CHAPTER V
	CONCLUSION
	SUMMARY:
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This means that, after investing in all three components of intellectual capital, capitalization or transformation processes inside a company are possible. It is possible to expect improvement of the company's total asset value. At the same time, similar dependent variables were tested, and those are non-current asset values and total intangible assets. The non-current asset values are related to property, plant and equipment values (PPE). Taking this variable is important in order to see whether capitalization and transformation processes are concentrated towards intangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . .. . . . .. . . . . .. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . .. . . . .. . . . . .. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . .. . . . .. . . . . .. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . .. . . . .. . . . . .. . .. . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. … … . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.2 RESULTS FINDINGS ........................................................................................................ 5.3 LIMITATIONS IN RESEARCH ...........................................................................................

  What is visible to the human eye are all fruit products, trees and leaves. However, what is not visible are roots under the ground. The same applies to intellectual capital. Everything visible are new products, new services, new processes, new procedures, new systems, new employees, new structure.Everything not visible are all components and inputs that created previous elements that are visible, and those are: intellectual capital, human capital, organizational capital, relational capital, knowledge, ideas, innovation, information, competencies, skills, capabilities.

	MVA:	Market Value Added
	NOPAT:	Net Operating Profit After Tax
	OECD:	Organization for Economic Cooperation and Development
	PhD:	Philosophy Doctor
	PMS:	Performance Measurement System
	R&D:	Research and Development
	RBV:	Resource-Based View
	ROA:	Return on Assets
	ROIC:	Return on Invested Capital
	S&P:	Standards and Poors
	SC:	Structural Capital
	SCE:	Structural Capital Efficiency
	SFAC:	Statement of Financial Accounting Concepts
	SME:	Small Medium Entreprises
	TBV:	Total Book Value
	TIA:	Total Intangible Assets
	TNCA:	Total Non-Current Assets
	UK:	United Kingdom
	US:	United States
	VA:	Value Added
	VAIC:	Value Added Intellectual Capital
	WACC:	Weighted Average Cost of Capital

Table 1 :

 1 Percentage of output for the sector for which intangibles were measured. . . . . . . . .17

Table 2 :

 2 Definitions of intangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28

Table 3 :

 3 Intangible assets considered in terms of useful life. . . . . . . . . . . . . . . . . . . . . . . . . . 35

Table 4 :

 4 Intellectual capital definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

Table 5 :

 5 Customer Capital Elements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Table 6 :

 6 Strengths and Weaknesses of intellectual capital measurement methods. . . . . . . . . 67

Table 7 :

 7 Definitions of intellectual capital investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .92

Table 8 :

 8 Types of expenditures and accounting treatments of R&D. . . . . . . . . . . . . . . . . . . 103

Table 9 :

 9 Calculation of research asset. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107

Table 10 :

 10 Transformational factors and indicators. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .115

Table 11 :

 11 Components of ICTEM model. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .116

Table 12 :

 12 Dimensions of knowledge assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

Table 13 :

 13 Deduction approach characteristics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160

Table 14 :

 14 Depreciation rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .172

Table 15 :

 15 Classification of industries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .173

Table 16 :

 16 Calculation of Research Asset. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175

Table 17 :

 17 Transformational factors by ICTEM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187

Table 18 :

 18 Table of components by ICTEM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188

Table 19 :

 19 Number of companies included in the first research model. . . . . . . . . . . . . . . . . .194

Table 20 :

 20 Number of companies per industry in the first research model. . . . . . . . . . . . . . . 195

Table 21 :

 21 Number of companies included in the second research model. . . . . . . . . . . . . . . .196

Table 22 :

 22 Number of companies per industry in the second research model. . . . . . . . . . . . .197

Table 23 :

 23 Justification of variables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198

Table 24 :

 24 Descriptive statistics. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .212

Table 25 :

 25 Pearson Correlation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219

Table 26 :

 26 Statistical Relations between Variables in the first research model. . . . . . . . . . . .232

Table 27 :

 27 Statistical Relations between Variables in the second research model. . . . . . . . . 233

The SIFO group was as a consultant group of the management control methods for intangibles(Johanson, U. et al. 1998).

ACKNOWLEDGEMENTS

As this three-year journey is coming to an end, I would like to thank many people to whom I owe a significant debt of gratitude for their help and support throughout my studies.

First of all, I would like to thank my supervisor, professor Elisabeth Walliser, who was patient,

am right now. Also, I gratefully thank my supervising professor Eric Cauvin for his involvement in the earlier stages of this research.

Then, I would like to thank the whole Laboratory (GRM), at my Faculty IAE Nice, where

Commercial Expenses variable movement

Based on Figure 40 above, it can be concluded that the company that invests the largest amount in commercial activities is Monoprix Exploit Par Abbreviation MPX. We can make a conclusion that values start from €1,000 and finish at €684,690,000. This is an indicator that the sample is highly diversified and heterogenous and is composed of small, medium and large French companies. The Figure 41 shows that the sample of companies observed is highly diversified. This is stated because the distribution of value of Costs of Sales ranges from €3,555 up to €3,905,922,000.

Costs of Sales variable movement

When compared to all the other companies, Monoprix Exploit Par Abbreviation MPX and Decathlon invest the most.

Independent Variables movement

Figure 43: Movement of independent variables

The Figure 43 above presents the movements of all independent variables. As it can be concluded, small companies have the highest investments in Personnel Costs, whereas the situation is different when it comes to large companies whose investments are highest in the Costs of Sales or relationships with their clients. One more interesting fact is that regardless of whether a company is small or large and multinational, all of them spend on the given variables, which is very optimistic and positive. This is the proof that companies are highly innovative and competitive regardless of their size and industry. The exploration produced by different authors about innovativeness of French economy was proven and validated with my data sample.

The fact is that French companies invest in intellectual components, but the question is how they manage it? How do they use those investments, and in which manner?

Descriptive Statistics

Descriptive values of analyzed companies in the sample are provided in the 3,693,153; 6,289,476; 29,469,536; 16,361,130; 18,211,491; 84,546,702 and 118,432,756