Intangible investment and non-financial performance of Egyptian firms: the moderating role of the COVID-19 pandemic

Abstract

Purpose This study aims to examine the impact of intangible investment on non-financial performance. This study also examines the moderating effect of the COVID-19 pandemic on this relationship. Design/methodology/approach This study extracted data from annual reports for a sample of Egyptian firms from 2012 to 2020. This study used the generalized method of moment for testing research. Findings This study finds that intangible investment positively affects non-financial performance and the COVID-19 pandemic has weakened this positive effect. Research limitations/implications A small sample size is one of the limitations of this study. Furthermore, because of the lack of data in Egypt, the analysis does not include other measures of intangible investment. Finally, the sectoral analysis does not include all sectors because of the lack of observations in some sectors. Practical implications This study offers practical and social implications. It would help policymakers, regulators and shareholders to realize the importance of the intangible investment and also shed light on the consequences of the COVID-19 pandemic. It also offers managerial implications. It motivates managers to invest more in intangible investment as an important resource to increase customer satisfaction and loyalty, enhance the internal operating performance and improve learning and growth, which result in creating sustainable competitive advantage. Originality/value This study provides new empirical evidence on the impact of intangible investment on different dimensions of non-financial performance. To the best of the authors’ knowledge, this paper offers the first empirical evidence on the moderating role of the COVID-19 pandemic in the relationship between intangible investment and non-financial performance.