Intellectual Capital and Value Creation of Listed Insurance Companies in Nigeria: Is Innovation Capital Matter?

Abstract

The shift from traditional economy to knowledge base economy globally makes the study of intellectual capital as it relate to creation of value becomes imperative. Therefore, this study aimed at investigating the impact of intellectual capital on the value creation of the listed insurance companies in Nigeria for the period of 2009-2018. The listed insurance companies in Nigeria are seventeen (17) as at 31 st December, 2018, out of which a sample of fourteen (14) companies were selected. The study employed correlation research design and data were analyzed with the aid of multiple regression technique. Using 140 firm year panel observations, fixed effect GLS regression was used with a view to control for heteroscedasticity observed. The findings revealed that Human capital and innovation capital are negative and significantly related with value creation of the listed insurance companies in Nigeria. However, structural capital is found to be positive and significantly related with the value creation of the listed insurance companies in Nigeria. Therefore, the study recommends amongst others that the Board of Directors responsible for the strategic decision of the corporate entities should formulate policies viable enough to trigger more investment on the structural capital as it has a potential of increasing corporate value. However, management should invest less on Human capital and research and development as they lack potentiality of enhancing value creation and device other means of boosting the value of their companies.