European Journal of Accounting, Auditing and Finance Research (EJAAFR)

EA Journals

Intellectual Capital

Intellectual Capital and Shareholders’ Wealth. The Economic Value Added Approach (Published)

The role of intangible assets such as intellectual capital promoting corporate competitiveness and further shareholders’ value has attracted attention in the finance literature. This study investigated intellectual capital efficiency as a source of creating shareholders’ wealth in Nigeria. To achieve the study’s aim, correlational research design was adopted. The study’s data were collected from content analysis of financial statements of listed service companies in Nigeria.  The sample used in this study includes 17 service firms listed on the Nigeria Exchange Group from 2011 to 2022. The VAIC model was utilized to estimate intellectual capital. Descriptive statistics were conducted while some diagnostic tests were piloted before the regression analysis.    The random effect regression model was used to verify whether the studied variables impact shareholders’ wealth of listed service companies in Nigeria. Findings indicated that value added intellectual coefficient as a measure of intellectual capital has a significant positive association with shareholders’ wealth. Results further revealed that human capital efficiency, relational capital efficiency and capital employed efficiency (as components of intellectual capital) are significantly and positively associated with shareholders’ wealth while structural capital efficiency has a positive but not significant relationship with shareholders’ wealth creation. The study concludes that efficient management of intellectual capital can enhance shareholders’ wealth in listed service companies in Nigeria and recommends amongst others that firms should make strategic plans regarding intellectual capital and intangible assets as it can increase corporate competitive advantage.


Keywords: : Human Capital, Intellectual Capital, Relational capital, Shareholders Wealth, capital employed, economic value added, structural capital

Disclosure of Intellectual Capital in Annual Reports: An Empirical Study of the Listed Companies in Bangladesh (Published)

As the world economy is experiencing a transition from industrial to knowledge economy, intellectual capital (IC) has become a prominent feature of business transactions and discourse. Interest in IC and IC disclosure is rising in developed and developing countries. At present, Intellectual Capital Disclosure (ICD) is done voluntarily by very few leading corporations all around the world. Omission of ICD may adversely influence the quality of decisions made by users of accounting information or lead to material misstatements. Hence, rising importance of IC has necessitated insightful studies. With this background in mind, the study of 25 Bangladeshi knowledge based companies listed in Dhaka Stock Exchange (DSE) from Information Technology considered to be highly knowledge intensive has been undertaken in order to find out the disclosure level of recording and reporting of intellectual capital through content analysis of their corporate annual reports. It is evident from the study that level of intellectual capital reporting in the Bangladeshi companies is negligible and intellectual capital reporting has not received any preference or priority for the mentors of these corporations. On the basis the findings, the study recommends national and international accounting regulatory bodies to develop specific and uniform standard on identifying, measuring and reporting IC.

Keywords: Information Technology, Intellectual Capital, Knowledge-based Economy, Tangible Assets

Effect of Intellectual Capital on Financial Performance of Banks in Nigeria (Published)

This paper appraised the effect of intellectual capital on financial performance of firms in Nigeria using the banking industry.  The research used the Value Added Intellectual Coefficient (VAIC) to ascertain the extent that intellectual capital indices affect financial performance of three Nigeria. Data were collected from the published annual financial statements of the three banks and analyzed using regression tool. The study indicates that IC has a positive and significant effect on banks’ financial performances of the banks but some are not significant. The results further showed that the banks are statistically different in both the intellectual capital and its financial performance indicators. It also shows that the banks with high IC also show high financial performance. The study recommends banks in Nigeria invest vigorously in development of their human capital as a key driver of firm’s performance. They should also provide the infrastructures needed for to achieve a virile human capital in the system.

Keywords: Financial Performance, Gross Earnings., Intellectual Capital, Return on Assets, Return on Equity

The Strategic Perspective of Intellectual Capital Accounting and Increased Market Value to Business Organizations in the Knowledge Society (Published)

The importance of this study status enjoyed by the accountant in creating additional positive flows directly, and indirect contribution in rising in the capital markets through the creation of an enabling environment capable of overcoming the problems facing professional activities and services for accountants and insurance company and shareholder requirements efficiently and effectively. This development led to a change in the Outlook for accounting work which was considered a service center because it was limited to logging operations and Fund, and with modern developments have changed the perception of the accounting strategy as a profit center and Given to the accountant of suggestions for alternatives to investment and finance operations and undermine the risk gap as a missed in negotiating with all parties, such as optimization of the advertising side of accounting resulting creation flows additional profit and effective contribution in shaping strategic plans which reflect positively on the market capitalization of the business. The main results of the researcher are: The changing perception of intellectual capital accounting strategic axis produce about profits and flows and actual additions contribute to increasing the market value of the business, and this changed perception of accounting service center to profit center. Successful organizations are able to address the gaps and shortcomings in the efficiency of the accounting staff and see how willing those cadres to deal with sophisticated technologies.

Keywords: Business Organizations, Information Technology, Intellectual Capital, Market Value


The emergence of high technology, information, and innovation based environment in the world today has greatly altered the way and manner businesses are done globally. This new technology which of course utilizes high level of intellectual capital also determines the level of financial performance of business organizations. Some organizations which hitherto were rated very high in terms of their profitability and other financial performances are today being rated very low simply because of their non-adoption of this intellectually based technology. This study uses the Value Added Intellectual Coefficient (VAIC) model to compare both the intellectual capital indices as well as the financial performance variables of six highly rated banks in Nigeria with the aim of determining if the deviations in their financial performance indices could be explained by the deviations in the banks’ intellectual capital variables. The study adopted the ex-post facto research design. It was systematically conducted using longitudinal time series data generated from the Nigeria Stock Exchange and from annual reports and accounts of the selected banks in Nigeria spanning from year 2000 to 2012. The study adopted the Duncan Multiple Range Test (DMRT) of ANOVA across the six selected banks in Nigeria for the test of the hypotheses. The SPSS statistical software (version 17.0) was used for the data analysis. From the analyses, it was discovered that there were significant deviations in both the financial performance indicators and in the intellectual capital variables among the six banks studied. The results further showed that the banks are statistically different in both the intellectual capital indices and in the financial performance indicators. The study also established that the banks with high intellectual capital also recorded high financial performance and therefore recommends that all banks should embrace this new intellectually based technology in order to enhance their financial performances, returns to their different stakeholders as well as in their service delivery to their customers.

Keywords: Financial Performance, Intellectual Capital, Nigerian Banks, VAIC

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