THE MODERATION ROLE OF RELATIONAL CAPITAL ON THE RELATIONSHIP BETWEEN INTELLECTUAL CAPITAL AND FIRM PERFORMANCE OF THE INDUSTRIAL SECTOR IN JORDAN

• Main Author: KAMELIA MOH'D KHIER AHMAD AL MOMANI
• Format: Thesis
• Language: English
• Published: UNIVERSITI MALAYSIA TERENGGANU 2022
• Online Access: http://umt-ir.umt.edu.my:8080/handle/123456789/16076
• Institution: Universiti Malaysia Terengganu

Many researchers have been relying on the value-added intellectual coefficient method (VAICTM), developed by Pulic (1998), to examine the relationship between intellectual capital (IC) and firm performance. Previous studies have found a discrepancy in the results due to misinterpretation of the technological development of the company's management. VAICTM has been criticized for excluding relational capital (RC) in the model. Therefore, this thesis investigated the moderating role of RC on the relationship between IC and firm performance. This study thus aimed to examine whether firm performance is influenced by IC and its components, and also whether RC moderates the relationship between IC and its components, and firm performance. Using panel data models of 50 industrial companies listed on the Amman Stock Exchange (ASE) during 2008-2017, this study found a significant positive influence of IC on firm performance. Specifically, capital employed efficiency (CEE) had a significant positive influence on market to book ratio (M/B); human capital efficiency (HCE) and structure capital efficiency (SCE) had a significant positive influence on earning per share (EPS) and return on assets (ROA). Results of hierarchical regression analysis of the moderating effect of RC show that the relationship between VAICTM, HCE, SCE and M/B became weak upon the interaction with RC. Further, RC weakly moderated the relationship between CEE and EPS and ROA. This study found no significant influence of RC on the relationship between VAICTM, HCE, SCE and EPS as well as ROA.