Intellectual Capital and Value Creation of Listed InsuranceCompanies in Nigeria: Is Innovation Capital Matter?1. Introduction In today's economy intangibles assets are the major drivers of wealth and growth. With emergence of the new economy it is a known fact that the value creation depends far less on their physical assets than on their intangible ones. These assets, often described as intellectual capital, are being recognized as the foundation of individual, organizational and national competitiveness in the twenty-first century (Wigg, 1997; Bounfour & Edvinsson, 2005). As noticed by Pike, Rylander and Roos (2002), 'as the business society is developed, the key step in value creation has ascended an intellectual staircase'.Intellectual capital has been identified as a set of intangibles (resources, capabilities and competences) that drives the organizational performance and value creation (Roos &Roos, 1997; Bontis, 1998; Bontis, Keow & Richardson,2000). This suggests causal relationships between intellectual capital and organizational value creation (Marr & Roos, 2005). However, intangible assets seldom affect performance directly. Instead, they work indirectly through relationships of cause and effect (Kaplan & Norton, 2004).Despite the tremendous theoretical improvement during the last years, intellectual capital phenomenon requires theory and research methodology that enhances the integration of theory construction and theory testing. Research in intellectual capital is actually, at critical cross-roads with increased emphasis on developing theoretical concepts and testing relationships guided by such concepts. It is vital to consolidate some findings, namely arrive at a set of operational measures that meet minimal criteria of measurement (Maria & Jorge, 2005).Intellectual capital that has been theoretically raised in the last few years throughout the world is seen as one of the most value-creating resources in entrepreneurial growth of firms, hence the need to develop and manage intellectual capital has become a serious obligation in the national level and in the business arena in such a way that the emergence of knowledge-based economy can be observed (Iranmahdi, Moeinaddin, Shahmoradi & Heyrani, 2014).However, the traditional accounting has been used over 500 years ago as the basis for the current financial report which fails to adapt to the changes in the economy, especially in knowledge-asset reporting requirements (Widyaningdyah, 2008); this is because the financial statements are not able to present the relevant information regarding the amount of the value of the intangible asset so that it can influence corporate policy. Failure to report knowledge-assets by the traditional accounting can be seen from the phenomenon that occurs in some large companies such as knowledge-
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