EFFECT OF INTELLECTUAL CAPITAL DISCLOSURE ON FIRM VALUE OF LISTED FINANCIAL SERVICES COMPANIES IN NIGERIA

Abstract

This study examined the effect of intellectual capital disclosure on the value of listed financial services
companies in Nigeria. Specifically, the study assessed the individual effects of human capital disclosure,
structural capital disclosure, and relational capital disclosure on the value of listed financial services
companies in Nigeria. This study adopted an ex post facto research design. The population of this study
consisted of 37 out of 52 financial services companies quoted on the Nigerian Exchange Limited (NGX)
as at December 31st, 2023. Data were collected from the published annual financial statements of the
sampled companies for a period of ten years (2014-2023). The study used Tobin’s Q to measure firm
value, while intellectual capital disclosure was proxied using human capital disclosure, structural capital
disclosure, and relational capital disclosure. The multiple regression analysis technique was used to test
the hypotheses. The result based on the overall explanatory power, revealed that 61.50% of the changes
in the value of the financial services companies in Nigeria can be attributed to changes in intellectual
capital disclosure. Based on the individual explanatory variables, the result of the random effect model
revealed that human capital disclosure has a positive and significant effect while structural capital
disclosure has a negative and significant effect. Furthermore, relational capital disclosure has a positive
but insignificant effect on the value of quoted financial services companies in Nigeria. The study concluded
that intellectual capital disclosure is an important factor needed for improving the value of companies in
the financial sector. From the findings and conclusion, the study recommended that increased investments
should be made in the three areas of intellectual capital, especially in the aspect of human capital
development.