Nexus between Intellectual Capital and Financial Performance Sustainability: Evidence from Listed Jordanian Firms

Authors

Ali M. Alrabei, Department of Accounting, School of Business, Jadara University, Irbid, JordanFollow
Leqaa N. Al-Othman, Financial and Administrative Sciences, Al-Hosn University College, Al-Balqa Applied University, JordanFollow
Thaer A. Abutaber, Department of Accounting, School of Business, Jadara University, Irbid, JordanFollow
Mustafa S. Alathamneh, Department of Accounting, School of Business, Jadara University, Irbid, JordanFollow
Tareq M. Almomani, Department of Accounting, School of Business, Jadara University, Irbid, JordanFollow
Mohammed H. Qeshta, Accounting and Finance Department, College of Administrative Sciences, Applied Science University, Kingdom of BahrainFollow

Author Country (or Countries)

Jordan

Abstract

Purpose: The authors observe the effect of exploring the reality of Intellectual Capital (IC) and its impact on the financial performance of Jordanian industrial firms in Amman Stock Exchange. This empirical research explores the effect of intellectual capital on financial performance using data from 36 Jordanian industrial firms listed in Amman Stock Exchange for the period 2016-2020. The Value-Added Intellectual coefficient (VAIC) was adopted to measure the intellectual capital, while the return on assets (ROA), return on equity (ROE), and earnings per share (EPS) were adopted as measures of the companys financial performance. The effect of IC was tested by using statistical analysis, dependent on the data obtained from annual financial statements. The results showed that the IC has a significant and positive effect on profitability due to its significant effect on ROA and EPS. However, it has not been proven that IC affects the ROE. This research extends the research on IC and aims to enrich studies in this field, especially in the Jordanian market. It reflects the reality of Intellectual Capital and its impact on industrial firms’ performance in Jordan as an example of developing countries

Digital Object Identifier (DOI)

https://dx.doi.org/10.18576/amis/170514

Recommended Citation

M. Alrabei, Ali; N. Al-Othman, Leqaa; A. Abutaber, Thaer; S. Alathamneh, Mustafa; M. Almomani, Tareq; and H. Qeshta, Mohammed (2023) "Nexus between Intellectual Capital and Financial Performance Sustainability: Evidence from Listed Jordanian Firms," Applied Mathematics & Information Sciences: Vol. 17: Iss. 5, Article 14.
DOI: https://dx.doi.org/10.18576/amis/170514
Available at: https://digitalcommons.aaru.edu.jo/amis/vol17/iss5/14