The role of knowledge assets and corporate social responsibility in creating firm value

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The purpose of this paper is to investigate how knowledge assets and corporate social responsibility jointly influence the market value of a firm. In the contemporary knowledge-driven economy, where competitive advantage is based on intangible and intellectual capital, this paper emphasizes the strategic significance of knowledge assets, open innovation, and sustainable development practices in creating and maximizing market value. By employing multiple regression analysis on panel data for ten financial years, the study examines the optimal composition of knowledge assets and the impact of CSR initiatives on firm value. Key findings highlight a crucial threshold leading to the peak of market value, approximately when knowledge assets account for about 36% of a firm’s total non-current assets. Further, this study demonstrates that maintaining a balance between internally developed knowledge assets and external acquisitions significantly enhances value, correlating with the cultivation of a capitalization ability. Finally, this paper shows that corporate social responsibility emerges as a substantial driver of generating firm value, suggesting that integrating these practices into corporate strategic decisions not only aligns with ethical goals but also enhances market valuation. The insights from this study offer valuable perspectives for both academic researchers and industry professionals, advocating for a well-balanced approach to corporate asset management and underscoring the strategic importance of incorporating corporate social responsibility.

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    • Figure 1. Conceptual model
    • Table 1. Composition of final sample based on county and economic sector
    • Table 2. Means and standard deviations for the continuous variables
    • Table 3. Multiple regression model development
    • Conceptualization
      Kyriakos Christofi
    • Data curation
      Kyriakos Christofi
    • Formal Analysis
      Kyriakos Christofi, Pieris Chourides
    • Investigation
      Kyriakos Christofi
    • Software
      Kyriakos Christofi
    • Writing – original draft
      Kyriakos Christofi, Pieris Chourides
    • Methodology
      Pieris Chourides
    • Validation
      Pieris Chourides, George Papageorgiou
    • Project administration
      George Papageorgiou
    • Supervision
      George Papageorgiou
    • Writing – review & editing
      George Papageorgiou