ASSESSING THE EFFECT OF INTELLECTUAL CAPITAL ON THE FINANCIAL PERFORMANCE OF ICT FIRMS IN NIGERIA

Abstract

The limited utilization of intellectual capital remains a key constraint to the financial performance of ICT firms in Nigeria. This study examines the effect of intellectual capital components; Research and Development Intensity (RDI), Human Capital Efficiency (HCE), and Structural Capital Efficiency (SCE), on the financial performance of Nigerian ICT firms. Employing an explanatory research design and quantitative approach, secondary data were obtained from audited annual reports of ten ICT firms covering 2015–2024. Panel data regression techniques, including Pooled OLS, Fixed Effects, and Random Effects Models, were applied, with the Hausman test determining the most suitable estimator. Descriptive, correlation, and diagnostic tests confirmed data validity and reliability. The results reveal that RDI, HCE, and SCE significantly and positively influence firm performance, while leverage negatively affects profitability. The study concludes that intellectual capital is a crucial determinant of profitability and competitiveness. It recommends that firms increase investment in R&D, enhance employee capacity development, and strengthen organizational structures to maximize innovation and operational efficiency.