Intellectual Capital, Firm Performance, and Sustainable Growth: A Study on DSE-Listed Nonfinancial Companies in Bangladesh

Abstract

Intellectual Capital (IC) stimulates corporate competitive advantages that can enhance firm performance and sustainable growth (SG). This study investigates IC’s affinity with and impact on accounting and market performance and SG of listed nonfinancial companies in Bangladesh. Data were collected from 69 nonfinancial companies for five years during 2017–2021, forming 345 observations. Modified Value Added Intellectual Coefficient (MVAIC) and steady-state models consecutively measured IC efficiency and Sustainable Growth Rate (SGR). The Robust fixed effect model was applied to confirm the highest reliable results. Results of MVAIC, Intellectual Capital Efficiency (ICE), and Human Capital Efficiency (HCE) showed a positive affinity with and impact on firm performance and SGR. Structural Capital Efficiency (SCE) showed an insignificant association with and impact on explained variables, whereas Relational Capital Efficiency (RCE) showed a significant negative relationship with and impact on the same. Tangible capital employed efficiency (CEE) enhanced firm performance but failed to confirm sustainable growth. The findings help business executives, government, and policymakers formulate strategic plans for sustainable resource utilization and can create value, competitive edges, and survival for firms. The study recommends that corporate entities should strive to enhance their efficiency in internal structural resources and relational activities to achieve better firm performance and sustainable growth.

Do Environmental Reporting Practices Impact Firm Performance in Bangladesh? An Empirical Perspective

“…Some earlier studies, like Kongkuah et al (2021), Wasara and Ganda (2019), Iheduru and Chukwuma (2019), Chinedu et al (2019), Sohel Rana and Hossain (2023), and Sukmadilaga et al (2023 found a negative and significant link between the variables. Further investigation by Onuora and Christian (2019) revealed that environmental expenses had a negative and minor influence on the ROCE of 11 listed Nigerian oil and gas companies over the years 2017 and 2018.…”

Nexus between corporate governance disclosure and firm performance

“…The following formula is utilized as the accounting-based performance measures of a firm: Hayes, 2021, Ali, Mahmud, and Lima, 2016, Rana & Hossain, 2023.…”

“…The natural logarithm of the total assets is applied for determining the firm size (Abad et al, 2017;Ducassy & Guyot, 2017;Islam, 2023). The firm age is calculated as the natural logarithm of the number of years after a company first registered on a stock market (Nguyen et al, 2015;Ammari et al, 2016, Rana & Hossain, 2023Agyemang et al, 2023). The last measure of corporate financial leverage is the proportion of total debt to total assets (Dey et al, 2018;Deswanto & Siregar, 2018).…”