Capital Employed and Structural Capital Efficiency and Financial Performance of Listed Non-Financial Companies in Nigeria

Abstract

In today's international economy, every firm strives to outperform its rivals. Such businesses require both physical capital and intellectual capital to have a competitive advantage. The financial performance of listed non-financial companies in Nigeria was investigated in this study in relation to capital employed and structural capital efficiency. For the study, an ex-post facto research design was used. The population of the study consisted of the 85 listed nonfinancial enterprises in Nigeria, from which seventyfive (75) were chosen using the purposive sample technique based on the availability of data. The study was supported by the human capital hypothesis. Financial performance was measured by return on assets (ROA), while capital employed efficiency (CEE) and structural capital efficiency were used to measure human and structural capital, respectively.with Firm Size used as control variables. Secondary data from the surveyed firms was gathered over the ten-year period of 2012 to 2021, and panel regression analysis was performed employing STATA 16 application. The findings showed that while structural capital has a negative and substantial impact on the return on asset of listed non-financial companies in Nigeria, capital employed efficiency (CEE) has a positive and significant impact on this metric. To remedy structural capital's detrimental impact on financial performance, the study advises management of nonfinancial enterprises to increase capital employed and decrease structural capital investment.