Research Article

EFFECT OF INTELECTUAL CAPITAL ON RETURN ON ASSETS OF INSURANCE FIRMS IN NIGERIA

Ngozi Ben Anuonye1*, Sunday Mlanga2, Luke N. Onuoha3
1 Department of Accounting & Finance, Crawford University, Igbesa, Ogun State
2 Department of Accountancy, Federal University Ndufu-Alike, Ikwo, Ebonyi State
3 Department of Accounting, Babcock University, Ilisan, Ogun State
* Corresponding author: benanuonye@yahoo.com
Published: Dec, 2016
Pages: 125-139
Views: 70
Downloads: 65

Abstract

Intellectual Capital (IC) needs to be measured by insurance entities. The inability of firms to measure and quantify intellectual capital has posed fundamental problems overtime in the value measurement of firms. This study evaluates the effect of HC and IC on the value creation of insurance firms in Nigeria using their ROA. Ex-post facto research design was adopted using primary and secondary data. The target population consisted of 150 workers in the 3 strategic departments of human resources, accounts and marketing of 18 insurance companies using purposive sampling technique. 150 questionnaires were distributed and a response rate of 74% was recorded. Face validity, content validity and pilot test were used to validate the instruments. The Cronbach’s Alpha reliability test gave a result of (r=0.806) and (r=0.800) respectively. Regression was used for data analyses at 5% level of significance. Results obtained from the primary data revealed that structural capital had significant positive effect on ROA at (P

Keywords

Human resources accounting human capital intellectual capital structural capital relational capital

References

  1. Alaka, N.S., Tijani, A.A., and Abass, O.A. (2011). Impact of strategic planning on the performance of insurance companies in Nigeria. European Journal of Humanities and Social Sciences. 5(1).
  2. Anuonye, N.B. (2014). Intellectual capital and financial performance of quoted insurance firms in Nigeria (2007-2011), (Doctoral dissertation). Babcock University, Ilisan, Nigeria.
  3. Appuhami, B.A.R. (2007). The impact of intellectual capital on investors' capital gains on shares: An empirical investigation of Thai Banking, Finance & Insurance Sector. International Management Review, 3 (2), 14-25.
  4. Baldini, M.A, G. Liberator. T. Ridi (2011). Brand transaction announcements and stock price volatility. Journal of Intellectual Capital.12(3), 2. Retrieved fromwww.emeraldpublishing.
  5. Bataineh, M., & Al Zoabi, M. (2011).The effect of intellectual capital on organisational competitive advantage: Jordanian commercial banks (Irbid District): An empirical study. International Bulletin of Business Administration,(10), 15-17. Retrieved from www.eurojournals.co
  6. Bontis, N. (2004). National intellectual capital index: A United Nations initiative for the Arab region. Journal of Intellectual Capital, 5(1), 13-39.
  7. Chiucchi, M.S. (2013). Intellectual capital accounting in action: Enhancing learning through interventionist research. Journal of Intellectual Capital,14(1), 48-68.
  8. dePablos, P. (2003). Intellectual capital reporting in Spain: A comparative view. Journal of Intellectual Capital, 4 (1), 61-81.
  9. Edvinsson, L., & Malone, M.S. (1997).Intellectual Capital: realising your company's true valueby finding its hidden brainpower. New York, USA. Harper Business Inc.
  10. Epetimehin, F.M., and Ekundayo, O. (2011). Organisational knowledge management: Survival strategy for Nigeria insurance industry.Journal of Management and Corporate Governance,3, 53-64, retrieved from www.centresinpub.org
  11. Flamholtz, E.G. (1999). Current issues, recent advancements and future directions in human resource accounting. Journal of Human Resource Costing & Accounting, 4 (1), 11-25.
  12. Iswati, S., and Anshori, M. (2007).The influence of intellectual capital to financial performance at insurance companies in Jakarta Stock Exchange (JSE). Proceedings of the 13th Asia Pacific Management Conference, Melbourne, Australia.
  13. Moslehi, A., Mohaghar, A., Badie, K. and Lucas, C. (2006). Introducing a toolbox for IC measurement in the Iran insurance industry. The Electronic Journal of Knowledge Management, 4(2), 169-180.
  14. Namvar, M., Fathian, M, Gholamin, M.R., and Akhavan, P. (2011).Exploring the role of human capital on firm's structural capital in Iranian e-business industry. 3rd International Conference on Information and Financial Engineering, IPEDR vol. 12 (2011) IACSI Press, Singapore.
  15. Onafalujo, A.K, Eke, P.O. and Akinlabi, B.H. (2011). Impact of international finance reporting standards on insurance management in Nigeria. Euro-Journals Publishing, Inc. 12, 128-142.
  16. Ong, T.S., Yeoh, L.Y., and The, B.H. (2011). Intellectual capital efficiency in Malaysian food& beverage industry. International Journal of Business and Behavioural Sciences, 1(1), 16-31.
  17. Pandey, I.M. (2010). Financial Management, (10th edition). Retrieved from http://www.flipkart.com/financial-management-10th/p/itmdytktxhkmh4dc
  18. Pulic, A. (2004). Intellectual capital-does it create or destroy value? Measuring Business Excellence, 8(1), 62-68.
  19. Roos, G. & Roos, J. (1997). Measuring your company's intellectual performance. Long Range Planning, 30(3):413-426.
  20. Rowbottom, N. (1998). Intangible asset accounting and accounting policy selection in the football industry (Doctoral dissertation). University of Birmigham, U.K.
  21. Singh M. (2009). Human resource accounting: Challenge for accountants. International Research Journal, 2(5), 440-442.
  22. Soumet, D.(2007, June). Intellectual Capital Statement. Technical paper on Zone Industrielle Nord, VMI 86507 MONTAIGU.
  23. Tongo, C.I. (2010). Accounting for intellectual capital: A 21stcentury responsibility for Strategic Managers. Journal of Management Systems, 22 (1), 39-51.
  24. Uadiale, O.M., and Uwuigbe, U. (2011).Intellectual capital and business performance: Evidence from Nigeria.Interdisciplinary Journal of Research in Business 1(10), 49-56.
  25. Verguwen, P.G., and Alem, F.J.(2005). Annual report of IC disclosures in the Netherlands, France and Germany.Journal of Intellectual Capital, 6(1), 80-104.
  26. Wang, Y., and Xu, Q.R. (2002). Intellectual capital and its measurement. Resources Development Management, 14, 11-16.
  27. Yahaya, K.A. (2006). Impact of investment in human resource training and development on employee effectiveness in Nigerian banks. Journal of Social & Management Studies, 12, 186-197.
  28. Yuan, Q.H. (2001). Corporate intellectual capital management, Beijing. Economic and Management Publishing House.
  29. Zou X., and Huan T.C (2011). A study of the intellectual capital's impact on listed banks' performance in China. African Journal of Business Management, 5(12), 5001-5009.
How to Cite

Anuonye, N. B., Mlanga, S., & Onuoha, L. N. (2016). EFFECT OF INTELECTUAL CAPITAL ON RETURN ON ASSETS OF INSURANCE FIRMS IN NIGERIA. Nigerian Journal of Accounting Research, 12(2), 125-139.

N. B. Anuonye, S. Mlanga, and L. N. Onuoha, "EFFECT OF INTELECTUAL CAPITAL ON RETURN ON ASSETS OF INSURANCE FIRMS IN NIGERIA," Nigerian Journal of Accounting Research, vol. 12, no. 2, pp. 125-139, December 2016.

Share this article:
Facebook X / Twitter LinkedIn
Download PDF Back to Articles