Intellectual Capital Determinants and Financial Performance of Listed Manufacturing Companies in Nigeria
Abstract
This study assessed the effect of intellectual capital determinants and financial performance of listed manufacturing companies in Nigeria from 2013-2023. The study employed descriptive research design using time series data of ten (10) years (2013-2023). The population was made of one hundred and two (102) listed manufacturing companies in Nigeria, that cut across eight (8) sub-sectors on the floor of Nigerian Exchange Group (NXG) as at December 2023 of which eighty-two (82) entities were sampled for the study. Data for analysis were collected from the published financial statements. Panel multiple regression was used for the analysis. Intellectual capital components were measured by human capital efficiency, structural capital efficiency, relational capital efficiency, innovation capital efficiency and capital employed efficiency. The study found that structural capital, relational capital and capital employed have positive and significant effect on financial performance, measured by ROA. While human and innovation capital have negative and insignificant effect on financial performance of listed manufacturing firms in Nigeria. The study recommended manufacturing firms to implement policies that enhance and upgrade their structural, relational and capital employed, while judicious use and efficient investment in both human capital and innovation capital for optimal performance of listed manufacturing firms in Nigeria be applied.
Keywords
Intellectual Capital
Human Capital Efficiency
Structural Capital
Relational Capital
Innovation Capital
Capital Employed
Return on Asset
Financial Performance
References
Abik, Chariri & Isgiyarta, (2021). The influence of board size on intellectual capital disclosure by Kenyan listed firms. Journal of intellectual capital, 29(2), 15-32. Adebisi, J. F., & Salawu, R. O. (2020). Intellectual capital and banks' performance: An empirical study of Nigerian banks. African Journal of Economic and Management Studies, 11(2), 223-237. Adeyeye, O. J., Oyewunmi, A. E., & Falohun, T. O. (2021). Intellectual capital, innovation, and firm performance: A study of listed manufacturing firms in Nigeria. Journal of Accounting and Finance, 8(3), 31-45. Ahangar, R.G (2011). The relationship between intellectual capital and financial performance an empirical investigation in an Iranian company. Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120. Bontis, N. (1998). Intellectual capital: An exploratory study that develops measures and models. Management Decision, 36(2), 63-76. Dewi & Saudah, 2012) (Meritum, 2022). Intellectual capital and radical innovation: Exploring the quadratic effects in technology-based manufacturing firms. Technovation, 54, 35-47. Drucker (2023). Intellectual Capital and Financial Performance of Deposit Money Banks in Nigeria. EPRA International Journal of Multidisciplinary Research (IJMR), 9(6), 248-251 (Efenyumi, Okoye & Nwoye, 2022)). Intellectual capital and corporate performance in Nigeria. banks. American Journal of Finance, 1(5), 78-73. Ezeoha, A. E. (2017). Intellectual capital, knowledge management and organizational performance: Theoretical perspective. International Journal of Management Science and Business Administration, 3(5), 30-39. Fasasi, Y. A., & Adeoti, J. O. (2019). Effect of intellectual capital on financial performance of listed deposit money banks in Nigeria. Journal of Finance and Economics, 7(1), 10-18. (Finel & Dionme, 2017). Impact of intellectual capital on financial performance. International Journal of Academic Research in Economics and Management Sciences, 2(1), 6. Grant, R. M. (1996). Toward a knowledge-based theory of the firm. Strategic Management Journal, 17(S2), 109-122. Gathrie & Pelty (2000) Impact of intellectual capital on financial Performance on oil marketing firms in Nigeria. Information and knowledge management, Vol.8, No.9, 2018. Hamdan, A. (2018). Intellectual capital and firm performance: Differentiating between accounting-based and market-based performance. International Journal of Islamic and Middle Eastern Finance and Management, 2(4), 1-17. Inyada, S.J. (2018). Intellectual capital and bank performance in Nigeria: An empirical analysis using pragmatic models. American International Journal of Contemporary Research, 8(2), 61-68. John-Akamelu, R. C., & Iyidiobi, F. C. (2018). Intellectual capital and performance of Nigerian banks. International Journal of Innovative Finance and Economics Research, 6 (1), 60-74. Kamal, M.H.M., Mat, R.C., Rahim, N.A., Husin, N., & Ismail, I. (2012), “Intellectual capital and firm performance of commercial banks in Malaysia”, Asian Economic and Financial Review, 2(4), 577-590. Madumere, I., & Ubani, G. I. (2022). Intellectual Capital and Financial Performance of Deposit Money Banks in Nigeria. International Journal of Accounting, Finance, and Management, 5(3). 16. Muchran (2020) The moderating effect of firm size on the relationship between board structure and financial performance of deposit money banks in Nigeria. Sahel Analyst: Journal of Management Sciences 14 (3), University of Maiduguri. Nadeem, M., De Silva, T. A., Gan, C., & Zaman, R. (2017). Boardroom gender diversity and Intellectual Capital Efficiency: Evidence from China. Pacific Accounting Review. Nahapiet, J., & Ghoshal, S. (1998). Social capital, intellectual capital, and the organizational advantage. Academy of Management Review, 23(2), 242-266. Ofurum, C. O., Oyintonefie, E., Fubara, S. & Azuike, N. (2023). The effect of intellectual capital on the financial performance of deposit money banks in Nigeria. Advances in Social Sciences Research Journal, 10(1), 312-328. Onyekwelu, U.L. (2016). Effect of intellectual capital on corporate valuation of firms in Nigeria. A PhD Dissertation submitted to Department of Accountancy, Nnamdi Azikiwe University, Awka. Nigeria. Ozkan, N., Cakan, S., & Kayacan, M. (2016). Intellectual capital and financial performance: a study of the Turkish Banking Sector, Borsa Istanbul Review, 17 (3), 190-198. Park, D. B., Nunkoo, R., & Yoon, Y. S. (2015). Rural residents' attitudes to tourism and the moderating effects of social capital. Tourism Geographies, 17(1), 112-133. Pulic, A. (2004). Do we know if we create or destroy value?. International Journal of Entrepreneurship and Innovation Management, 4(4), 349-359. Roos, G., & Roos, J. (2021). Measuring your company's intellectual performance. Long Range Planning, 413-426. Sani. B. A.& Aminu.A (2023) Impact of Intellectual capital on financial performance of listed oil and gas firms in Nigeria. Fudma Journal of Accounting and Finance research fujafr volume 1, issue 2; ISSN: 2992-4693. Taylor, F. W. (1911), The principles of scientific management, New York, NY, USA and London, UK: Harper & Brothers, LCCN 11010339, OCLC 233134. Also available from Project Gutenberg. Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. strategic management journal, 18(7), 509-533. Wang, M. (2011), “Measuring intellectual capital and its effect on financial performance: evidence from the capital market in Taiwan”, Frontiers of Business Research in China, 5(2), 243-265. Xu, J., & Liu, F. (2020). The impact of intellectual capital on firm performance: a modified and extended VAIC model”, Journal of Competitiveness, 12 (1), 161-176. Yao, H.X., Haris, M., Tariq, G., Javaid, H.M. & Khan, M.A.S. (2019), “Intellectual capital, profitability, and productivity: evidence from Pakistani financial institutions”, Sustainability, 11 (14), 3842. Zack, M. H. (1999). Managing codified knowledge. Sloan Management Review, 40(4), 45-58.
