scholarly journals Intellectual Capital and its Impact on Financial Performance: A Study of Oil and Gas Sector of Pakistan

2014 ◽  
Vol 43 ◽  
pp. 125-140 ◽  
Author(s):  
Muhammad Arslan ◽  
Rashid Zaman
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Significant Relationship ◽  
Oil And Gas ◽  
Random Effect ◽  
Random Effect Model ◽  
Value Added ◽  
Annual Reports ◽  
Tangible Assets ◽  
Oil And Gas Sector

The study examines the Intellectual Capital (IC) performance of oil and gas sector of Pakistan over the period of 2007 to 2011 and its impact on corporate financial returns. The study uses value added intellectual coefficient (VAICitTM) to measure IC performance and its various components of VAICitTM like (HCEit, SCEit and CEEit) and its impact on financial performance (ROEit, ROIit and EPSit). Micro panel data of oil and gas sector registered in KSE-100 index is collected from their consolidated annual reports over the period of 2007 to 2011. The IC performance is measured by Ante Pulic Model (VAICitTM) and its effect on corporate returns (ROEit, ROIit and EPSit) is tested by Random Effect Model estimation. Hausman test suggests that study accepts null hypothesis (Chi2. Prop > 0.05) where for ui is uncorrelated with regressor means that random effect is preferred versus alternative fixed effect in all the proposed research models. The study reveals that VA is considered an important component for measuring the VAICitTM performance and it has positive and significant relationship with firm’s profitability (EPSit) and HCEit and SCEit have positive and significant relationship with firm’s financial performance (ROEit and ROIit) respectively. So, this study explores that Intellectual Capital Efficiency (ICE) has relatively larger contribution for measuring the VAICitTM performance where HCEit and SCEit execute substantive role to accelerate the financial performance of oil and gas sector of Pakistan as compare to tangible assets.

scholarly journals The association between intellectual capital and financial performance in the Islamic banking industry

2019 ◽  
Vol 13 (1) ◽  
pp. 75-93 ◽  
Author(s):  
A.A. Ousama ◽  
Helmi Hammami ◽  
Mustafa Abdulkarim
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Positive Impact ◽  
Value Added ◽  
Annual Reports ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Gcc Countries ◽  
The Impact

Purpose The purpose of this study is to empirically investigate the impact of intellectual capital (IC) on the financial performance of Islamic banks operating in the Gulf Cooperation Council (GCC) countries. Design/methodology/approach The study measures IC by the value added intellectual coefficient model. A regression analysis was used to assess the impact of IC on financial performance. The research sample consisted of Islamic banks operating in the GCC countries during the years 2011, 2012 and 2013. Data originated from the annual reports of Islamic banks. Findings The results support the thesis that IC has a positive impact on the financial performance of Islamic banks. Even though the average IC is lower than that reported in other studies, the positive effect on financial performance is obvious. The findings also show that human capital (HC) is higher than capital employed (CE) and structural capital (SC). The study reveals that SC has an insignificant impact on the financial performance of the Islamic banks compared to CE and HC. Practical implications The findings provide empirical evidence that IC affects the Islamic banks’ financial performance. It helps Islamic banks in the GCC countries to understand how to use their IC efficiently, especially SC as it is yet to be used efficiently. Also, the findings benefit the relevant authorities (e.g. legislators and central banks) who could use them to emphasise strategic policy reforms whenever required. Originality/value The current research adds to the empirical studies in the GCC countries as it views the region as a collective as opposed to individual countries. It also extends the IC and performance measurement literature of Islamic banks in the GCC countries. Moreover, the current study enriches the limited literature on IC in the context of Islamic banking.

scholarly journals Determinants of financial performance of Islamic banks: an intellectual capital perspective

2017 ◽  
Vol 8 (2) ◽  
pp. 130-142 ◽  
Author(s):  
Tasawar Nawaz ◽  
Roszaini Haniffa
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Positive Relationship ◽  
Value Added ◽  
Annual Reports ◽  
Content Type ◽  
Significant Positive Relationship ◽  
Accounting Performance ◽  
Capital Efficiency ◽  
The Impact

Purpose The purpose of this paper is to empirically examine the effect of intangible resources, i.e. intellectual capital (IC) on financial performance of 64 Islamic financial institutions (IFIs) operating in 18 different countries for the period 2007-2011, while controlling for firm-specific variables, namely, bank size, level of risk, listing status, and firm complexity. Design/methodology/approach The required data to calculate different constituents of IC are derived from Bankscope database. Value Added Intellectual Coefficient (VAIC) methodology devised by Pulic is used to determine the impact of IC on financial performance of IFIs. Findings Results indicate a significant positive relationship between VAIC and accounting performance based on return on assets (ROA). The results further indicate a significant positive relationship between accounting performance and capital employed efficiency (CEE) and human capital efficiency (HCE), but no significant relationship with regards to structural capital efficiency. Overall, the results suggest that value creation capability of IFIs is highly influenced by HCE and CEE. Research limitations/implications The main limitation of the present study lies in its methodological tool, the VAIC methodology, which has been criticized by some researchers as not really measuring IC. Despite the inherent limitation of the VAIC methodology which relies on secondary data published in annual reports, it is still considered by some researchers as one of the best available tool to measure firms’ IC in the absence of access to detailed internal information on IC. Practical implications The findings may serve as a useful input for Islamic bankers in managing their investments in IC within their institutions. Originality/value The main contribution of this paper is to use a previously little-studied area, Islamic banking and finance, to identify the effect of intellectual capital on performance.

scholarly journals Lease Financing as a Performance Driver: Evidence from Oil and Gas Sector of Pakistan

2020 ◽  
Vol 8 (1) ◽  
pp. 53-61
Author(s):  
Muhammad Usman Arshad ◽  
◽  
Zahid Bashir ◽  
Muhammad Asif ◽  
Ghalib Hussain ◽  
...  
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Oil And Gas ◽  
Research Study ◽  
Oil And Gas Industry ◽  
Least Square ◽  
Annual Reports ◽  
Future Research ◽  
Gas Industry ◽  
Oil And Gas Sector

The sole aim of the study is to analyze the effect of the lease as a potential driver of firm’s financial performance in oil and gas industry of Pakistan. The population for the current research study comprises of 18 listed companies of oil and gas sector of Pakistan but the final sample includes only nine companies which were using lease financing. The data were collected from the annual reports of companies from the year 2013 to 2017. Lease financing is used as an independent variable while firm performance as dependent variable defined by ROA. ordinary least square method was used. The study concludes that financing through the lease is not a significant driver of financial performance in oil and gas companies of Pakistan and also negatively affecting it rather these companies heavily rely on debt financing which decreases their performance. Only the firm size has a positive and significant effect on a firm’s performance in this sector. The policy makers and management should consider lease financing as a potential factor of decreasing the firm performance in oil and gas industry of Pakistan for future consideration. The research study has considerable importance for the oil and gas sector of Pakistan as the first in this domain for the future research, especially for the lease financing

Firm Size, Operational Risk and Performance: Evidence from Commercial and Services Companies Listed in Nairobi Securities Exchange

2019 ◽  
Vol 3 (VI) ◽  
pp. 372-379
Author(s):  
Susan Kerubo Onsongo ◽  
Stephen Muathe ◽  
Lucy Mwangi
Keyword(s):  
Risk Management ◽  
Financial Performance ◽  
Firm Size ◽  
Random Effect ◽  
Random Effect Model ◽  
Operational Risk ◽  
Target Population ◽  
Annual Reports ◽  
Operational Risks ◽  
And Performance

The study sought to assess the financial performance of the companies listed in the commercial and services sector at the Nairobi Securities Exchange (NSE), Kenya with an aim of determining the implications of firm size and operational risk on their performance. It was anchored on the agency theory. The study applied explanatory research design and the target population was the 14 companies listed under this sector. Secondary panel data contained in published annual reports for the year 2013 to 2017 was collected. A panel regression model was applied with the random effect model being used based on the Hausman specification test. Findings showed that operational risk had a positive insignificant effect on performance as proxied by return on assets (ROA). The findings further showed that firm size had a moderating effect on the relationship between operational risks and performance. It concluded that firm size played a role in the risk management of a company i.e. companies with higher total assets managed risk better than their counterpart. The study recommends that for companies to record improved financial performance, they needed to manage their operational risks by implementing risk management initiatives and increasing their total assets base.   

scholarly journals Impact of Intellectual Capital on Financial Performance of Banks in Tanzania

2015 ◽  
Vol 1 (1) ◽  
pp. 17-24 ◽  
Author(s):  
Janeth N. Isanzu
Keyword(s):  
Human Capital ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Value Added ◽  
Physical Capital ◽  
Annual Reports ◽  
Balance Sheets ◽  
Structural Capital ◽  
Knowledge Based Economy ◽  
Capital Efficiency

Since the financial sector reforms took place in the last two decades, Banks in Tanzania have continued to play the major role in reshaping the economy of the nation. With the emergence of knowledge based economy many firm have changed their way of doing business instead of relying more on physical capital they have shifted to intellectual capital. This is no exception for the banks operating in developing counties Tanzania included. Many studies have been done in the area of intellectual capital and its contribution to the value of the firm. This study sets out to extend the evidence by investigating the intellectual capital of banks operating in Tanzania for the period of four years from 2010 to 2013. Annual reports, especially the profit and loss accounts and balance sheets of the selected banks have been used to obtain the data. The study uses Value Added Intellectual Capital model (VAICTM) in determining intellectual capital and its three major components like Human Capital Efficiency (HCE) Structural capital efficiency (SCE) and Capital Employed Efficiency (CEE). The results revealed that Intellectual capital has a positive relationship with financial performance of banks operating in Tanzania and also when the VAICTM was divided into its three components it was discovered that the financial performance is positively related to Human capital efficiency and Capital employed efficiency but is negatively related to Structural capital efficiency.

Impact of intellectual capital on financial performance: evidence from the Bangladeshi textile sector

2018 ◽  
Vol 14 (4) ◽  
pp. 429-454 ◽  
Author(s):  
Leena Afroz Mostofa Chowdhury ◽  
Tarek Rana ◽  
Mahmuda Akter ◽  
Mahfuzul Hoque
Keyword(s):  
Financial Performance ◽  
Performance Management ◽  
Emerging Economies ◽  
Intellectual Capital ◽  
Textile Industry ◽  
Value Added ◽  
Annual Reports ◽  
Future Research ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to investigate the influence of intellectual capital (IC) on financial performance and, in turn, to provide insights into its impact on emerging economies. Design/methodology/approach Data were collected from 34 textile firms in Bangladesh between 2013 and 2017. The IC efficiency, through value-added intellectual coefficient (VAIC) model, and its impact on financial performance, through return on assets (ROA), return on equity and asset turnover (ATO), was examined using descriptive statistics and multiple regression techniques. The analysis is based on secondary data obtained from annual reports. Findings The results indicate the impact of VAIC components on financial performance and also demonstrate diverse relationships with changes in financial indicators. The VAIC components significantly influenced productivity outcomes, with tangible capital playing a major role in both productivity and profitability. Moreover, it was found that structural capital had a considerable effect on ATO and ROA with human capital indicating an insignificant impact on all financial performance indicators. Research limitations/implications The research outcome is specific to the textile industry in emerging economies. The study may guide future research on IC performance in textile firms and cross-industry comparisons. Practical implications Managers, firm owners and regulators need to align IC to performance management to sustain the competitive advantage in globalised competitive settings. Originality/value The study provides an empirical evidence and extends knowledge of IC utilisation for enhancing the financial performance of the textile firms in emerging economies.

Intellectual Capital, Innovation and Firm Performance of Pharmaceuticals: A Study of the London Stock Exchange

2017 ◽  
Vol 16 (02) ◽  
pp. 1750017 ◽  
Author(s):  
Shahid Amin ◽  
Shoaib Aslam
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Structural Equation ◽  
Stock Exchange ◽  
Value Added ◽  
Secondary Data ◽  
Sem Analysis ◽  
Annual Reports ◽  
London Stock Exchange ◽  
The Impact

The objective of this study is to explore the empirical structural links among intellectual capital (IC), innovation and firm’s financial performance, furthermore, the impact of IC and innovation on firm’s financial performance has also been measured. Value added intellectual coefficient model (VAIC) has been used for the measurement of IC. Innovation is measured through research and development (R&D), products development and products in pipeline, whereas, financial performance is measured through traditional financial measures such as return on assets (ROA), return on equity (ROE), earnings per share (EPS), assets turnover ratio (ATO) and market-to-book ratio (MB). The study was based on secondary data, and it has been collected from the published annual reports of listed pharmaceutical firms in London Stock Exchange. The research was carried for the three year period of 2012–2014 and our sample consists of 207 firm-year observations. Structural Equation Modelling (SEM) technique is used to address cause–effect relationships among endogenous and exogenous constructs. Empirical results of SEM analysis support that IC and its components have positive and significant impact on innovation and firms’ financial performance. Moreover, innovation also has significant impact on firms’ financial performance. The study is valuable for the manager, decision makers and policy makers to recognise the value of IC and its philosophy to obtain and sustain competitive advantage through innovation.

scholarly journals Islamic Banking - Value Added Intellectual Coeficient (IB-VAIC) as an Intellectual Capital Proxy Indonesian Islamic Banking

2015 ◽  
Vol 2 (2) ◽  
pp. 127
Author(s):  
Ema Pratiwi ◽  
Rahmad Kadry
Keyword(s):  
Intellectual Capital ◽  
Balance Sheet ◽  
Main Idea ◽  
Value Added ◽  
Annual Reports ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Tangible Assets ◽  
Top Performers ◽  
Overall Performance

The main idea of this research is to make the concept of intellectual capital as the most valuable intangible assets for the company. Basically, tangible assets which is owned by the company is also controlled by humans. This study offers Islamic Banking-Value Added Intellectual Coefficient (IB-VAICTM) modified the model pulic by Ulum (2013) as a performance measurement of intellectual capital of Islamic banking in Indonesia. This study also makes Islamic banks rank in term of Best Performance Index (BPI) which is measured using IB-VAIC™. The data used are annual reports, particularly financial performance and balance sheet, obtained either through the official website of each bank as well as from BI website. This study finds that during the study period (2010-2014), the overall performance of Islamic banking in Indonesia in the category of "good performers" with a score of VAIC 2.57. The results also indicates that individual banks that including into the category of "top performers" are three (3) banks, "good performers" 4 (four) Bank and "common performers" 4 (four) Bank. The limitations of this study is that the data used only 11 (eleven) Commercial Bank (BUS) in Indonesia, while the overall number of banks per January 2015 was 197.

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