Intellectual capital and financial performance: linear and non-linear evidence from commercial state interest entities

Prince Yeboah Boateng (), Francis Aboagye-Otchere () and Nicholas Asare ()
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Prince Yeboah Boateng: University of Professional Studies, Accra
Francis Aboagye-Otchere: University of Ghana
Nicholas Asare: University of Ghana

SN Business & Economics, 2025, vol. 5, issue 8, 1-40

Abstract: Abstract This study examines the impact of intellectual capital (IC) on financial performance (FP) of commercial state interest entities (CSIEs) from a developing country. The study employs panel data of 71 CSIEs from Ghana over the period 2012–2021 by adopting the two-step system generalized method of moments and dynamic panel threshold regression estimation techniques to test the hypothesized links. The results suggest that IC generally improves FP, but this is more pronounced with partially-owned CSIEs as compared to fully-owned ones. Again, the IC element (HCE) affects FP positively but is mostly prominent in partially-owned CSIEs than that of fully-owned CSIEs. However, the IC element (CEE) substantially encourages FP within fully-owned CSIEs. Subsequently, the study observed that IC augments FP (profitability) in the short-run and decreases FP (profitability) in the long-run, although this is largely attenuated in partially-owned CSIEs. Moreover, the overall IC has an unfavourable effect on FP (productivity) below the thresholds, whereas above the thresholds, IC spurs FP (productivity), which is typically associated with partially-owned entities. With policy, the study provides evidence to oversight bodies when developing an apposite IC framework and recommends that to the CSIEs. This paper accounts for the non-linearity effect using dynamic panel threshold regression within the multidimensional context of CSIEs. Additionally, the study is unique by utilizing IC metrics (VAIC and MVAIC) to link with FP in the scope of CSIEs.

Keywords: Intellectual capital; Financial performance; Two-step system GMM; Dynamic panel threshold regression; Commercial state interest entities (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s43546-025-00874-z

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