Title: Intellectual Capital and Financial Performance of Listed Financial Holding Companies in Nigeria
Authors: ONUH, Emmanuel Okpe and Yahya Uthman Abdullahi
Volume: 8
Issue: 10
Pages: 34-44
Publication Date: 2024/10/28
Abstract:
The shift from an Agrarian Society (Society 1.0) to a Human-Centered Society (Society 5.0) highlights the critical role of Intellectual Capital (IC) in achieving competitive advantage and sustainable success within the knowledge-based economy. This study examines the impact of IC on the financial performance of Financial Holding Companies (FHCs) listed on the Nigeria Exchange Group (NGX), addressing the lack of empirical research in this area. Utilizing the Modified Value-Added Intellectual Coefficient (MVAIC) model, which includes Human Capital Efficiency (HCE), Structural Capital Efficiency (SCE), Capital Employed Efficiency (CEE), and Relational Capital Efficiency (RCE), the research explores IC's influence on Return on Assets (ROA). An ex-post facto design analyzes secondary data from FBN Holdings plc, FCMB Group plc, and Stanbic IBTC Holdings plc (2018-2022). Generalized Least Squares (GLS) regression ensures robust results by addressing heteroskedasticity and multicollinearity. Findings indicate a significant negative relationship between HCE and SCE with ROA, suggesting that unintegrated investments in human and structural capital may impair financial performance. Conversely, CEE and RCE show no significant impact on ROA. These results emphasize the need for strategic alignment of human and structural capital investments to enhance financial performance. The study contributes to the limited knowledge on IC in Sub-Saharan Africa's financial sector and offers insights for policymakers and industry stakeholders.