Moderating Effect of Board Financial Expertise on the Relationship between Intellectual Capital and Market Value of Listed Deposit Money Banks in Nigeria

Abstract

The global economic environment has witnessed transformation from traditional tangible to new intangible economy due to globalisation, exponential growth of technological changes. The new economy, which has been tagged as knowledge-based economy, has the capability to improve the competitive advantage of organizations. Intellectual capital is knowledge assets which belongs to an entity and most importantly capable of improving the competitive power of the entity by adding value to the corporate organization. It is based on this that the study examined moderating effect of board financial expertise on the relationship between intellectual capital and market value of listed deposit money banks in Nigeria from 2011-2020. The study adopts ex-post facto research design while intellectual capital is measured by human capital and structural capital while market value is measured by market value added. Panel multiple regression is used for the analysis. From the analysis, the study found that human capital efficiency has positive significant effect on market value added. However, structural capital efficiency has negative significant effect on market value added. Furthermore, moderated human capital efficiency has negative significant effect on market value added while moderated structural capital efficiency has a positive but insignificant effect on market value added. Based on the finding, the study recommends that banks should pay sufficient attention to the human capital since it is considered as the most significant asset to the company by implementing policies that will enhance and upgrade their employees' skills and competence in the area of training and development.