The impact of intellectual capital on firm’s financial performance: empirical evidence from Bahrain
This study contributes to the intellectual capital (IC) area of literature by investigating the impact of IC on the firm’s financial performance of two main sectors in the Bahrain Bourse, financial and service sectors, during five years, 2013–2017. The study employs canonical correlation analysis as...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
LLC "CPC "Business Perspectives"
2020-12-01
|
| Series: | Investment Management & Financial Innovations |
| Subjects: | |
| Online Access: | https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/14304/IMFI_2020_04_Desoky.pdf |
| _version_ | 1826910201845907456 |
|---|---|
| author | Abdelmohsen M. Desoky Gehan Abdel-Hady Mousa |
| author_facet | Abdelmohsen M. Desoky Gehan Abdel-Hady Mousa |
| author_sort | Abdelmohsen M. Desoky |
| collection | DOAJ |
| description | This study contributes to the intellectual capital (IC) area of literature by investigating the impact of IC on the firm’s financial performance of two main sectors in the Bahrain Bourse, financial and service sectors, during five years, 2013–2017. The study employs canonical correlation analysis as a unique statistical method to analyze data gathered from 29 sampled companies, representing 145 firm-year observations over the five years. Two groups of variables are employed. The first represents the firm’s financial performance with two variables (return on equity – ROE and return on assets – ROA), while the second includes three intellectual capital components, namely human, customer, and structural capital. Findings related to the financial sector reveal that all IC components (human capital, customer capital, and structural capital) have positive correlations with firm performance except for the labor costs variable (the sub-variable of human capital), which has a negative correlation with firm’s performance. Human capital is also found to be the most significant component of the IC, while structural capital is reported as the lowest effect on the firm’s performance, consistent with some previous research findings. Furthermore, the services sector results revealed that IC is significantly associated with the firm’s performance. Moreover, two sub-variables of human capital (number of Bahraini employees and labor costs) have the most significant impact on the firm’s performance. |
| first_indexed | 2024-12-14T00:43:24Z |
| format | Article |
| id | doaj.art-d6a118d545e54aa7bfc5f3631b8eef6b |
| institution | Directory Open Access Journal |
| issn | 1810-4967 1812-9358 |
| language | English |
| last_indexed | 2025-02-17T09:55:29Z |
| publishDate | 2020-12-01 |
| publisher | LLC "CPC "Business Perspectives" |
| record_format | Article |
| series | Investment Management & Financial Innovations |
| spelling | doaj.art-d6a118d545e54aa7bfc5f3631b8eef6b2025-01-02T05:54:07ZengLLC "CPC "Business Perspectives"Investment Management & Financial Innovations1810-49671812-93582020-12-0117418920110.21511/imfi.17(4).2020.1814304The impact of intellectual capital on firm’s financial performance: empirical evidence from BahrainAbdelmohsen M. Desoky0https://orcid.org/0000-0002-9714-438XGehan Abdel-Hady Mousa1https://orcid.org/0000-0003-2336-5101Ph.D. in Accounting, Associate Professor, Accounting Department, University of BahrainPh.D. in Accounting, Associate Professor, Accounting Department, University of BahrainThis study contributes to the intellectual capital (IC) area of literature by investigating the impact of IC on the firm’s financial performance of two main sectors in the Bahrain Bourse, financial and service sectors, during five years, 2013–2017. The study employs canonical correlation analysis as a unique statistical method to analyze data gathered from 29 sampled companies, representing 145 firm-year observations over the five years. Two groups of variables are employed. The first represents the firm’s financial performance with two variables (return on equity – ROE and return on assets – ROA), while the second includes three intellectual capital components, namely human, customer, and structural capital. Findings related to the financial sector reveal that all IC components (human capital, customer capital, and structural capital) have positive correlations with firm performance except for the labor costs variable (the sub-variable of human capital), which has a negative correlation with firm’s performance. Human capital is also found to be the most significant component of the IC, while structural capital is reported as the lowest effect on the firm’s performance, consistent with some previous research findings. Furthermore, the services sector results revealed that IC is significantly associated with the firm’s performance. Moreover, two sub-variables of human capital (number of Bahraini employees and labor costs) have the most significant impact on the firm’s performance.https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/14304/IMFI_2020_04_Desoky.pdfBahrain Boursecanonical correlationcustomer capitalhuman capitallabor costsstructural capital |
| spellingShingle | Abdelmohsen M. Desoky Gehan Abdel-Hady Mousa The impact of intellectual capital on firm’s financial performance: empirical evidence from Bahrain Investment Management & Financial Innovations Bahrain Bourse canonical correlation customer capital human capital labor costs structural capital |
| title | The impact of intellectual capital on firm’s financial performance: empirical evidence from Bahrain |
| title_full | The impact of intellectual capital on firm’s financial performance: empirical evidence from Bahrain |
| title_fullStr | The impact of intellectual capital on firm’s financial performance: empirical evidence from Bahrain |
| title_full_unstemmed | The impact of intellectual capital on firm’s financial performance: empirical evidence from Bahrain |
| title_short | The impact of intellectual capital on firm’s financial performance: empirical evidence from Bahrain |
| title_sort | impact of intellectual capital on firm s financial performance empirical evidence from bahrain |
| topic | Bahrain Bourse canonical correlation customer capital human capital labor costs structural capital |
| url | https://businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/14304/IMFI_2020_04_Desoky.pdf |
| work_keys_str_mv | AT abdelmohsenmdesoky theimpactofintellectualcapitalonfirmsfinancialperformanceempiricalevidencefrombahrain AT gehanabdelhadymousa theimpactofintellectualcapitalonfirmsfinancialperformanceempiricalevidencefrombahrain AT abdelmohsenmdesoky impactofintellectualcapitalonfirmsfinancialperformanceempiricalevidencefrombahrain AT gehanabdelhadymousa impactofintellectualcapitalonfirmsfinancialperformanceempiricalevidencefrombahrain |