Open AccessImpact of Intellectual Capital on Corporate Performance
Author(s) -
Sedeaq Nassar
Publication year - 2020
Publication title -
european journal of business and management research
Language(s) - English
Resource type - Journals
ISSN - 2507-1076
DOI - 10.24018/ejbmr.2020.5.6.647
Subject(s) - intellectual capital , structural capital , return on assets , return on equity , business , return on capital , return on capital employed , proxy (statistics) , accounting , financial capital , finance , human capital , economics , stock exchange , individual capital , capital formation , statistics , mathematics , economic growth
The main objective of current study is to investigate the relationship between intellectual capital and corporate financial performance of 34 from 48 companies listed on Palestine Exchange (PEX) over the period of 2012-2018. Pulic’s method “Value Added Intellectual Coefficient (VAIC)” is utilized to measure the Intellectual Capital (IC), and three of traditional accounting tools involving; return on equity (ROE), return on assets (ROA), and earning per share (EPS) ratios is used as a proxy of firm financial performance. The findings of Panel data model show that human capital efficiency (HCE) is consider as the most effective element of intellectual capital in the issue of value creation than structural capital and capital employed. Moreover, VAIC shows a good relationship with financial performance represented by return on assets (ROA). In conclusion, Palestinian listed companies are still weakly used its intellectual capital' potentials in create value.