The Impact of Intellectual Capital on Operational Performance in Jordanian Service Companies: Evidence from the Amman Stock Exchange

Abstract

Purpose: This study seeks to determine how intellectual capital (IC) affects the operational effectiveness of service companies listed on the Jordanian Amman Stock Exchange (ASE). Theoretical framework: The study is based on the concept of intellectual capital, which encompasses human capital, structural capital, and relational capital. These dimensions are examined to understand their influence on operational performance. Design/Methodology/Approach: The study population consists of 40 service companies listed on the ASE, with a sample of 22 companies selected for analysis. Data collection relied on secondary sources, including reports and bulletins issued by the ASE between 2017 and 2021. Regression analysis is used in the study to look at the connections between several operational performance metrics and intellectual capital. Findings: The findings reveal that human capital and structural capital have a significant positive impact on operational flexibility. Human capital and relational capital significantly influence cost efficiency. Structural capital, company size, and company age show significant effects on the inventory turnover rate. Human capital positively affects the asset turnover rate, while structural and relational capital do not exhibit significant effects. Research, Practical & Social implications: This study offers insightful information about the connection between intellectual property and operational effectiveness in service businesses listed on the ASE. The findings have practical implications for enhancing operational capabilities and efficiency within these organizations. Additionally, the study contributes to the existing knowledge on intellectual capital's impact on operational performance and fills a gap in the understanding of this relationship in the Jordanian context. Originality/Value: This study is one of the first to investigate how intellectual capital affects the performance of operational aspects in service businesses listed on the ASE in Jordan. By focusing on the unique characteristics of the Jordanian market, the study adds to the body of knowledge and advances knowledge of the function that intellectual capital plays in influencing operational success.