Does the efficiency of a firm’s intellectual capital and working capital management affect its performance?

Habib, A.M. and Dalwai, T. ORCID: 0000-0001-5754-5384, 2023. Does the efficiency of a firm’s intellectual capital and working capital management affect its performance? Journal of the Knowledge Economy. ISSN 1868-7865

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Abstract

This study explores the efficiency of intellectual capital (ICE) and working capital management (WCME) in the GCC industrial sector and its potential impact on firm performance. The data were gathered from Standard & Poor's database from 2015 to 2019. This study uses data envelopment analysis (DEA), regression analysis, and robustness tests to accomplish its aims. The results indicate that most firms do not employ their intellectual and working capital investments well and need improvement actions to achieve the best practices. The regression model results reveal that ICE and WCME significantly and positively influence firms' performance. The results of this study support the resource-based, trade-off, and pecking order theories. The study findings have important implications for many stakeholders; for example, they would be helpful for firm decision-makers in managing their investments in intellectual and working capital to achieve the best practices and improve a firm's performance. In addition, the findings would be helpful for financiers, because high-performance firms are likely to have more reasonable valuations that facilitate debt financing. Moreover, the findings have noteworthy implications for trading procedures as investors aspire to attractive economic returns for their investments in corporations that pasture ICE and WCME issues. Additionally, these findings have important implications for employee job satisfaction and retention by improving IC management.

Item Type: Journal article
Publication Title: Journal of the Knowledge Economy
Creators: Habib, A.M. and Dalwai, T.
Publisher: Springer Science and Business Media LLC
Date: 21 March 2023
ISSN: 1868-7865
Identifiers:
NumberType
10.1007/s13132-023-01138-7DOI
1878960Other
Rights: This version of the article has been accepted for publication, after peer review (when applicable) and is subject to Springer Nature’s AM terms of use, but is not the Version of Record and does not reflect post-acceptance improvements, or any corrections. The Version of Record is available online at: https://doi.org/10.1007/s13132-023-01138-7
Divisions: Schools > Nottingham Business School
Record created by: Laura Ward
Date Added: 08 Apr 2024 13:16
Last Modified: 08 Apr 2024 13:16
URI: https://irep.ntu.ac.uk/id/eprint/51210

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