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The Impact of Intellectual Capital on Firms’ Performance: Evidence from Saudi Arabia

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  • Afnan Alturiqi
  • Khamoussi Halioui

Abstract

The purpose of this study is to empirically investigate the relationship between intellectual capital (IC) measured by the value-added intellectual coefficient (VAIC) and firms’ performance (FP) in the Saudi context. Data are drawn from a sample of 25 Saudi firms listed on the Saudi Stock Exchange (Tadawul) for the period 2015-2018. Using the VAIC model, the multiple linear regression models were constructed to examine the relationship between intellectual capital (IC) and firms’ performance (measured in terms of financial and market performance). The findings indicate that there is a positive association between overall intellectual capital efficiency as well as each of its three components (human capital efficiency, structural capital efficiency, capital employed efficiency) and the firms’ financial performance. Additionally, there is a positive association between human capital efficiency(HCE), structural capital efficiency (SCE), and the firms’ market performance. Overall, the findings suggest that human capital efficiency (HCE) has a significant and positive impact on firms’ financial and market performance in Saudi Arabia. The VAIC method may be a useful tool for managers and investors in their decision process. This is the first study about the impact of intellectual capital on firms’ performance in four industry groups in Saudi Arabia using the VAIC model.

Suggested Citation

  • Afnan Alturiqi & Khamoussi Halioui, 2020. "The Impact of Intellectual Capital on Firms’ Performance: Evidence from Saudi Arabia," Accounting and Finance Research, Sciedu Press, vol. 9(4), pages 1-44, November.
    • Handle: RePEc:jfr:afr111:v:9:y:2020:i:4:p:44
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    References listed on IDEAS

    as
    1. Aristides Isidoro Ferreira & Luís Fructuoso Martinez, 2011. "Intellectual capital: perceptions of productivity a and investment," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 15(2), pages 249-260.
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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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