Intellectual Capital and Financial Performance: Evidenced from Quoted Non-Financial Firms in Nigeria

Feyisayo A. Akinbode & Joel A. Okewale

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Abstract

Performance is a major global challenge driving extensive organisational research. This study considered how Nigerian businesses’ financial success is impacted by their intellectual capital. It examined the effects of relational capital efficiency, capital employed efficiency, structural capital efficiency and human capital efficiency on financial performance of quoted non financial firms in Nigeria. Data were collected from 22 companies listed on the Nigerian Exchange Group (NGX) between 2013 and 2022 across four industries: manufacturing, ICT, health services, and oil and gas. This was done using an ex-post facto descriptive study design. Post estimation tests were utilised in conjunction with panel data analysis, incorporating fixed effect analysis, OLS (Ordinary Least Squares) analysis and random effect analysis. The study used the Generalised Method of Moments (GMM) to resolve endogeneity concerns and provided trustworthy estimations. The findings revealed that HCE considerably increased ROA, but both HCE and firm size (FS) positively influenced ROE. On the other hand, the financial performance of the companies was significantly and negatively impacted by SCE, CEE, and RCE. Overall, the study found that performance was primarily impacted negatively by intellectual capital. It was recommended that firms strengthen human capital, invest proactively in structural capital, optimise capital employed and maintain continuous investment in relational capital to enhance financial outcomes.

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