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Human Capital Efficiency, Structural Capital Efficiency, and Relational Capital Efficiency as Determinants of Financial Performance: Panel Evidence from Deposit Money Banks in Nigeria (2015–2024)

Adedipe Oluwaseyi Ayodele Ph.D, Omidiji-Akinwumi Joseph Oluwarotimi

Abstract

This study investigates the effect of intellectual capital efficiency on the financial performance of deposit money banks in Nigeria. Anchored in human capital theory and the resource-based view, the study decomposes intellectual capital into three components: human capital efficiency , structural capital efficiency , and relational capital efficiency following the Value Added Intellectual Coefficient methodology of Pulic (2000, 2004), and examines their individual and joint effects on return on assets , return on equity , and earnings per share . An ex-post facto research design was adopted, using secondary panel data drawn from the audited annual reports of thirteen (13) purposively sampled DMBs listed on the Nigerian Exchange Group over the period 2015–2024, yielding 130 firm-year observations. Descriptive statistics, Pearson correlation, and panel regression (fixed/random effects with robust standard errors, informed by the Hausman and Breusch-Pagan-Godfrey tests) were employed for data analysis. The results show that human capital efficiency has a positive and statistically significant effect on return on assets (β = 0.876, p < 0.001); structural capital efficiency has a positive and statistically significant effect on return on equity (β = 12.345, p = 0.004); relational capital efficiency has a positive but statistically insignificant effect on earnings per share (β = 2.345, p = 0.264); and the three intellectual capital components jointly and significantly affect composite financial performance (F = 32.45, p < 0.001; R2 = 0.512), with human and structural capital efficiency remaining significant in the joint model while relational capital efficiency does not. The study concludes that human and structural capital are the primary intellectual capital drivers of bank performance in Nigeria, while relational capital's contribution appears to be indirect, lagged, or inadequately captured by conventional proxies. It is recommended that bank managers treat human capital development as a strategic investment rather than an operating cost, integrate human capital initiatives with structural capital systems, and that regulators consider incorporating human capital indicators into prudential supervision frameworks.

Keywords

human capital efficiency; structural capital efficiency; relational capital efficiency; intellectual capital; bank performance

References

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