The Relationship between Intellectual Capital in the Fourth Industrial Revolution and Firm Performance in Jordan

Posted: 21 Apr 2021

Date Written: April 10, 2021

Abstract

Abstract. This paper attempts to determine if intellectual capital (IC) has an impact on firm performance in the industrial companies in Jordan. A quantitative approach was used, with value-added intellectual coefficient (VAICTM) methodology of IC measurement. Secondary data were used in measuring the study variables. The relationship between VAICTM in fourth industrial revolution (IR 4.0) and the ratios of earnings per share (EPS) and return on assets (ROA) were examined. The study sample comprised 50 industrial companies listed on the Amman Stock Exchange (ASE) covering the 2008-2017 period. Multiple Regression analysis was used in data analysis, involving panel data models. The obtained results prove a positive significant influence of VAICTM on EPS and ROA, and a positive significant relationship between human capital efficiency (HCE) and structural capital efficiency (SCE), and EPS and ROA, while no relationship was found between capital employed efficiency (CEE) and EPS and ROA. The results suggest the need for industrial companies in Jordan and in the Middle East to focus on intellectual capital (IC) elements, particularly human capital (HC), which is core to VAICTM. Moreover, this study is valuable to policymakers and managers in determining the industry development for better corporate returns.

Keywords: Intellectual Capital, Earning per Share, Return on Assets, Human Capital, Structural Capital, Capital Employed

JEL Classification: M480, D02, G21

Suggested Citation

Momani, Kamelia Moh'd Khier and Nour, Abdul-Naser Ibrahim, The Relationship between Intellectual Capital in the Fourth Industrial Revolution and Firm Performance in Jordan (April 10, 2021). Available at SSRN: https://ssrn.com/abstract=3823980

Kamelia Moh'd Khier Momani

affiliation not provided to SSRN

Abdul-Naser Ibrahim Nour (Contact Author)

An-Najah National University ( email )

Nablus
Palestine
Nablus, PA 00972
Palestine

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