Effect of Intellectual Capital on Performance of Multinational Companies in Nigeria

Abstract

In recent times, intellectual capital efficiency is the driving force for performance. This study seeks to ascertain the effect of intellectual capital on the performance of multinational companies in Nigeria. The longitudinal research design employed and data collected from the sampled twenty-four multinationals for the period of ten years 2010 to 2019. The data for the study analyzed using a panel regression with the aid of STATA 16 software.Resource based theory underpinned the study. Price earning (PE) ratio used as a proxy for performance in the study; while intellectual capital the independent variable of the study proxied by Capital Employed Efficiency (CEE), Human Capital Efficiency (HCE), and Structural Capital Efficiency (SCE). The control variables Revenue Growth (REVG), Firm Size (LFSIZ), and Firm Age (FAGE).The result revealed that Capital Employed Efficiency (CEE) has significantly and positively impacted the performance of multinational companies operating in Nigeria. Other independent variables, Human Capital Efficiency (HCE) and Structural Capital Efficiency (SCE) do not affect the performance of multinational companies in Nigeria.The study recommends that companies should invest in more revenue-generating activities as it significantly improved the performances of companies. They should pay attention to the development of human capital and infrastructure, subsequently affect the performance of companies in Nigeria.