Impact of Investments in Human Capital on Corporate Market Value

The objective of this research project is to study and understand the impact that the spending on intangible resources, namely continuous education, has on the intellectual capital and market value of companies in Portugal in a period of widespread crisis. Thus aims to analyse the existing correlations between these variables. In this paper we will make a literature review for each of the variables under study, namely continuous education, intellectual capital and company value. The study will focus on companies quoted on the Portuguese Stock Market in the period (2010-2012). To analyse the relationship between investment in continuous education and the market value relevance of the company's intangibles, will be used Tobin's Q (Andriessen, 2004). Expenditure in intangibles are an investment in business management terms. Educational attainments seems to have strategic importance in the knowledge intensive economy, and the human capital is a drive of value (Caragliu and Nijkamp, 2014). The literature considers that much of the value generated in the company is resulting from its intangible elements, namely, the intellectual capital (Edvinsson and Malone, 1997; Stewart, 1999; Kavida and Sivakoumar, 2010; Murale, 2010). Studies have shown that investment in intellectual capital dimensions results in an increase in worker productivity which, in turn, is translated into an increase in financial performance and, consequently, generates increases in the future market value of the firm (Zambrano et al., 2011). The literature review suggests that the value of the intangibles is the main factor responsible for the difference between the book value and the market value of companies.