The Impact of Intellectual Capital in Enhancing Corporate Performance: Evidence from Public Companies in MENA

Abstract

This study examines the relationship between Intellectual Capital (IC) and Financial Performance (FP) among the companies in the Middle East and North Africa (MENA) region. Based on the resource-based view and knowledge-based theory, this study adopts a conceptual approach consistent with the Value-Added Intellectual Coefficient (VAIC) model to examine the impact of human capital efficiency (HCE), capital employed efficiency (CEE), and structural capital efficiency (SCE), on performance indicators including return on assets (ROA), return on investments (ROI), and Tobin’s Q among publicly listed MENA companies. The lack of research on intellectual capital in developing economies. The results indicate that intellectual capital significantly enhances financial performance, with human capital emerging as the key factor. The findings suggest that knowledge-based resources are crucial for gaining a competitive advantage in emerging markets. They reveal that companies with greater efficiency in managing intellectual capital tend to achieve better financial performance. the study bridges the gap in literature of intellectual capital in developing economies and provides practical insights for managers and policymakers in MENA region. It emphasizes the strategic importance of investing in knowledge assets to enhance corporate performance.