IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT (IJEFM )

E-ISSN 2545-5966
P-ISSN 2695-1932
VOL. 9 NO. 9 2024
DOI: 10.56201/ijefm.v9.no9.2024.pg102.126

---

Empirical Measurement of the Effect of Human Capital Investment on Return on Assets of Banks in Nigeria

Chukwu, Ogwo (PhD); Osirim, Monday (PhD); Chukwu, Gospel Joseph (PhD) & Ahiakwo U. Simon (PhD)

---

Abstract

This paper is aimed at investigating the relationship between human capital investment and financial performance of deposit money banks in Nigeria. The study employed a survey research design. The population size of the study was two thousand and seventy three (2073) employees of twenty four (24) deposit money banks from six (6) states of the south-south geo-political zone; while the sample size was 335 of the employees. Data was collected by primary means. The findings of the study indicated that employees’ educational investment has a positive and significant relationship with return on assets; staff welfare investment showed negative and significant relationship with return on assets while employee health investment showed a positive and significant relationship with return on assets. The study concluded that these outcomes collectively emphasize the intricate and multifaceted nature of the linkages between human capital components and financial metrics within the banking sector. This led to the recommendation that these banks should continue to prioritize and strategically invest in educational initiatives for the benefits of their workforce as such investments are evidently associated with improved financial performance; and also, banks should carefully reassess and potentially reallocate their investments in employee health and welfare schemes ensuring a more targeted and impactful approach to achieve optimal financial performance.

keywords:

Human capital investment, return on assets, intellectual property, financial

---

Acheampong, M. (2020). Intellectual capital and its effect on financial performance of banks:
Evidence from Saudi Arabia. Procedia - Social
and Behavioral Sciences, 1(64), 201–207.
Aldaibat, I. & Irtaimeh, W. (2021). A surrogate measure of the firm’s investment in human
resources. Journal of Accounting Research, 12(2), 235–250.
Ali, A. & Chaudhry, B. (2022). Indian software and pharmaceutical sector ic and financial
performance.
Journal of Intellectual Capital, 10(3), 369–388.
Akintoye, E. (2019). Impact of intellectual capital on financial performance of banks in Tanzania.
Journal of International Business Research and Marketing, 1 (1), 16–23.
Chukwu, H., Ugo, I. & Osisioma, C. (2022). Impact of intellectual capital on productivity of
insurance companies in Ghana. Journal of Intellectual Capital, 20(6),
763–783.
Cross, U. (2022). Intellectual capital and financial performance: A study of the Turkish banking
sector. Borsa Istanbul Review, 17(3),
190–198.
Dae-bong, I. (2022). Inter effect of intellectual capital and performance: Empirical examination.
Industrial Management and Data Systems, 111(6), 810–829.
Dhatt, J., Tubotamuno, B. & Shaibu, D. (2021).A European empirical study of the relationship
between firms’ intellectual capital, financial performance and market value. Journal of
Intellectual Capital, 18(4), 771–788.
Diego, R., Emili, G. & Manuel M. (2022). Leveraging human capital by Kenneth Cline. BAI
Banking Strategies, 80(6), 2-5
Ezenyilimba, T., Ezejiofor, R. & Afodigbueokwu, M. (2022). Effect of human capital development
on the financial performance of banks in Nigeria: A study of selected public quoted
commercial banks: Journal of Advance Research in Business, Management and Accounting,
3(11), 1-32.
Filippo, W., Nicola, T. & Michele, I. (2022).Human capital development and organizational
performance in the food, beverage and tobacco industry in Lagos State. Nigeria: Nigerian
Journal of Management Studies 18(2), 27-35.
Freeman, J. (1976). Human capital management: the new competitive approach. International
Journal of Economics, Commerce and Management, 4(5), 1020-1034.
Ignacio, D. D. V., & Miguel, A. S. C. (2009). Human capital and sustainable competitive advantage:
an analysis of the relationship between training and performance. Int Entrep Manag J,
5(7),139– 163.



Haris, E., Tariq, M., Javaid, E. & Khan, L. (2022).Does investment in human resource
development affect financial performance? Empirical evidence from the banking sector of
Bangladesh: IIUC Studies, 14(2) 35-54.
Heikai, T Mbadike, N. S. & Ikechi, K. (2021). An empirical analysis of human capital development
and organizational performance in banking sector: a Nigerian experience.
International Journal of Economics, Commerce and Management 11(7), 1-15.
Helfert, T. (2020).The effect of human capital investment on corporate performance: a cross
sectional study of selected quoted companies in Nigeria. ICAN Journal of Accounting &
Finance, 2(6), 156-174.
Hussaini, D. & Lawal, R. (2021). Effect of human resource accounting on profitability of selected
quoted telecommunication firms in Nigeria. Contemporary Issues in Business Management:
48(1), 35-45.
Igbinoso, Y. & Chijuka, B. (2022). Human capital development and
organizational performance:
A conceptual review. International Journal of Innovative Research and Development, 8(1),
49-54.
Iwamoto, I. & Suzuki, R. (2022). The relationship between human capital efficiency and financial
performance: An empirical investigation of quoted Nigerian banks. RJFA, 4(4), 7-9
Izushi, E. & Haggins, E. (2021). Effect of human capital development in organizational
performance. Nigeria International Journal of Academic Research in Economics and
Management Sciences, 7(3), 60-78
John, U. & Cajetan, K. (2022).Human capital management as a tool for value creation.
International Journal of Advanced Academic Research | Social & Management Sciences,
14(6), 63-82.
Kabaje, Y., Omankhanlen, E. A. & Eriabie, S. (2022). Human capital development in first bank of
Nigeria
Plc. Mediterranean Journal of Social Sciences, 4(2) 783-801
Kareem, R. (2022). Effect of investment in human capital development on performance: Empirical
examination of the perception of small business owners in Nigeria. European Journal of
Economics, 2(2) 40-56.
Kharal, D., Zai-ur-Rehman, Y., Abrar, T. & Khan, M. (2020)Human capital investment as
economic value creation in Nigeria. International Journal of Business and Management,
10(1), 62-71.
Khrawish, F. Akanyonge, J. & Asapeo, A. (2021).The efficacy of liquidity management and
banking performance
in Nigeria. International Review of Management and Business Research 2(1),
7-9.



Mari, D., Soscia, E. & Terzani, B. (2022). A review of human resource accounting and
organizational
performance. International Journal of Economics and Finance, 5(8), 74–83
Mayer, U., Udongwo, U. & Ayodele, O. 2022). Human resource accounting and firm performance.
Global journal of commerce and management perspective, 3(4), 232-237
Monteiro, D. (2021). Intellectual capital performance of commercial banks in Malaysia. Journal
of Intellectual
Capital, 6(3), 385–396.
Ndubuisi, E. & Obi, Y. (2022). Impact of intellectual capital on financial performance of banks in
Tanzania. Journal of International Business Research and Marketing, 1 (1), 16–23.
Ngeno, K. (2022). The impact of investors’ behavior and managers’ overconfidence on stock
return: Evidence from Iran. Cogent Business & Management, 5(1), 155-156.
Nzuve, K. (2021). Firm’s financial performance and human resource accounting disclosure in
Nigeria. International Journal of Business and Management, 7(14), 67–75.

Okumbe, M. (2020). The relationship between intellectual capital and firm performance.
Corporate Governance and Organizational Behavior Review, 1(1),
32–41.
Olalekan, R. & Adeyinka, C. (2020). Human
resource management practices and firm outcomes:
Evidence from Vietnam. Journal of Asian Business and Economic Studies, 25(2), 221–238.
Onoriode, K. (2022). The relationship between human capital efficiency and financial performance
of Dutch production companies. Research Journal of Finance and Accounting, 6(8), 188–
Oppong, N., Romer, D. & Wei, D. (2022). On intellectual capital and financial performances of
banks in Malaysia. Cogent Economics & Finance, 6(1), 1453574.
Osirim, M; Wadike, C.G. & Davies, S.D. (2019). The impact of financial instruments on the
capacity of Nigerian banks to generate sustainable profits. International Journal of
Education and Social Research, Pepperdine University, Malibu, CA, USA; 7, September
edition, 93-94.
Prosvirkina, L. (2020). Should bankers be concerned with intellectual capital? A study of the Thai
banking sector. Journal of Intellectual Capital, 19(5), 897–914.
Rappaport, D. (2021). Study on the human capital accounting based on the enterprise Co-
governance logic by human capital and physical capital. Accounting Research, 8(1), 72–
Saiful, I. & Asfarawenti, A. (2022). Profitability determinants of financial institutions: Evidence
from banks in Pakistan. International Journal of Financial
Studies, 6(2), 1–28.



Stowe, U., Asongu, S., & Bekun, F. (2022). Empirical analysis of human capital development and
economic growth in European regions. Impact of education and training third report on
vocational training research in Europe: Background Report. Luxembourg: The International
Journali of Economics, Commerce and Management, 4(2), 13-24.
Utami, S., Nuzula, R. & Damayanti, V. (2022). Human capital investment and its effect on
organizational
performance, International Journal of Management, 6(4), 142-146.
Warusawitharana, I. (2021). Managing human capital development in small and medium-sized
enterpr

DOWNLOAD PDF

---

Back