The Effect of intellectual capital on financial performance of listed firms in Kenya: the moderating role of firm size
Date
2024
Authors
Kiminda, C. N.
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
The Nairobi Securities Exchange (NSE) plays a crucial role as a platform for capital raising and investment facilitation within Kenya's dynamic economy. Despite this, many firms listed on the NSE struggle with inadequate financial performance. This research aimed to explore the relationship linking intellectual capital to the financial performance of NSE-listed firms in Kenya, focusing on the prevalent issue of underperformance. Additionally, it investigated how firm size moderates this relationship. The study was based on three theoretical frameworks: The Resource-Based View theory, Social Capital Theory, and Dynamics Capabilities Theory, within a positivist philosophical stance. Both primary and secondary data were analyzed, with primary data being collected using structured questionnaires. The study followed a descriptive and cross-sectional research design, descriptive and inferential statistics were used to analyze the data. Correlation and multiple linear regression, were used to establish variations and associations between the variables. The study established that human capital has a positive relationship with financial performance of NSE listed firms. This was shown by the regression and correlation results which support the results as there existed a positive relation between human capital and ROA. The findings on structural capital and relational capital and financial performance similarly yielded a positive result establishing a positive relationship between structural capital and ROA and a positive relation between relational capital and ROA return on assets. The combined effect of intellectual capital positively affects financial performance measured in ROA.
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Citation
Kiminda, C. N. (2024). The Effect of intellectual capital on financial performance of listed firms in Kenya: The moderating role of firm size [Strathmore University]. http://hdl.handle.net/11071/15486