EFFECT OF INTELLECTUAL CAPITAL AND OWNERSHIP STRUCTURE ON FIRM PERFORMANCE: AN EVIDENCE FROM NON- FINANCIAL SECTOR IN PAKISTAN

Abstract

This study's objective was to check the impact of intellectual capital and ownership on firm performance of non-financial sector in Pakistan. Methodology and Design

ABSTRACT structure For five years (2018-2022), this research uses a balanced panel data analysis to examine the data of 30 non-financial enterprises from 14 industries that are listed on the PSE INDEX-100. The impact of IC efficiency and ownership structure on company performance was investigated using the intellectual coefficient model. As controls, the board size, firm age, and firm size were considered. Along with the Wooldridge test, Panel GMM regression was conducted on ROA. Panel regression was used to further test the robustness of the influence. Finding Revealed that IC efficiency has the potential effect towards Firm performance. Control variables were having variances which doesn’t provide not further or no impact between IC ownership structure and firm performance. Limitations Like many other studies, this one has certain restrictions. In order to assess the correctness of the IC, future research should consider the original VAIC model. This research solely includes non-financial enterprises in its sample. Only two ownership structure proxies and business performance were examined in this research together with three control variables. This research is restricted to examining the direct link between IC and company performance while controlling for other factors. Further evaluation is possible. Recommendation The results may also be useful to prospective investors who want to forecast a firm's future IC efficiency prior to making an investment choice in light of BS, FA, and FS. The study's findings may also be used as a starting point for politicians and corporate executives to create better strategies for using IC resources to gain competitive advantages. Additionally, this research offers policymakers proof that boosting FROWN in Pakistan's non-financial businesses will enhance corporate performance.