Value Relevance of Intellectual Capital of Selected Listed Manufacturing Firms in Nigeria

This study investigated the value relevance of intellectual capital among listed manufacturing firms in Nigeria over the period of 2013-2023. Drawing upon a sample of 46 manufacturing firms, the research explores the relationship between intellectual capital and firm value, as reflected in share prices. Utilizing panel data analysis and Ordinary Least Squares (OLS) regression models, the study examined the effect of three key components of intellectual capital - capital employed efficiency, structural capital efficiency, and human capital efficiency - on share prices. The findings reveal significant implications for firm valuation. Firstly, capital employed efficiency emerges as a crucial driver of share prices, indicating that firms effectively utilizing their capital resources are rewarded with higher market valuations. However, the study finds an insignificant effect of structural capital efficiency and human capital efficiency on share prices, suggesting that improvements in these areas may not substantially influence market valuation. These results underscore the complex dynamics of intellectual capital and its relationship with firm value in the Nigerian manufacturing sector. While capital efficiency plays a significant role in driving market valuations, the impact of structural and human capital efficiency appears to be less pronounced. The study contributes to the existing literature by providing empirical evidence on the value relevance of intellectual capital in the context of Nigerian manufacturing firms. The findings offer insights for practitioners and policymakers seeking to enhance firm performance and market valuation through strategic management of intellectual capital resources.