THE IMPACT OF INTELLECTUAL CAPITAL ON FIRM VALUE AND MODERATING ROLE OF MANAGERIAL OWNERSHIP AND INSTITUTIONAL OWNERSHIP

Abstract

The aim of this paper is to test the relationship between intellectual capital and firm value. In addition to that the moderating effect of managerial ownership and institutional ownership is tested between intellectual capital and firm value. The present study adopts quantitative methodology. The VAIC model is used to measure the intellectual capital and TobinsQ is used as a proxy for firm’s performance. Regression analysis is applied to test the relationship. The results indicate that institutional ownership does have an impact on the relationship between intellectual capital and firm performance. However, managerial ownership’s effect was insignificant. The present study uses the data from 2013-2018. The scope of this paper is limited to Pakistan nonfinancial sector of economy. This study provides evidence to top management of companies regarding the decision making of having institutional investor. This study is important as it contributes to emerging literature on intellectual capital.

Keywords

• intellectual capital
• firm value
• managerial ownership
• institutional ownership
• moderating effect