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The Nexus of Intellectual Capital and Firm Performance: Evidence from Jordanian Pharmaceutical Companies

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Cutting-Edge Business Technologies in the Big Data Era (SICB 2023)

Part of the book series: Studies in Big Data ((SBD,volume 136))

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Abstract

This paper examines the relationship between intellectual capital (IC) and the financial performance of Jordanian pharmaceutical companies (JPCs). We used secondary data collected from six JPCs, listed on the Amman Stock Exchange (ASE) over the period 2012–2016 to measure the Value-added intellectual coefficient (VAIC™) model, which is used to measure IC and its components, including an additional element, namely Relational Capital Efficiency (RCE). Earning per Share (EPS) and Asset Turnover Ratio (ATR) were used to measure financial performance. The results indicated no significant relationship between IC and the financial performance of Jordanian Pharmaceutical Companies. Further regression analysis on the individual components of IC showed that only Human Capital Efficiency (HCE) had a significant positive relationship with financial performance indicators, EPS, and ATR. The main limitation of this study is that it was conducted during the Arab Spring, which negatively affected the Jordanian economy. The findings imply that JPCs have utilized their human capital resources efficiently, and this component is vital for their competitive advantage.

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Author information

Authors and Affiliations

  1. Hittien College, Amman, Jordan

    Kamelia Moh’d Khier AlMomani & Sameer Al-Wadi

  2. Al-Zaytoonah University of Jordan, Amman, Jordan

    Belal Mahmoud AlWadi

Authors
  1. Kamelia Moh’d Khier AlMomani
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  2. Belal Mahmoud AlWadi
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  3. Sameer Al-Wadi
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Corresponding author

Correspondence to Belal Mahmoud AlWadi .

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Editors and Affiliations

  1. Faculty of Business, Information Systems and Business Analytics, Al-Zaytoonah University of Jordan, Amman, Jordan

    Saad G. Yaseen

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AlMomani, K.M.K., AlWadi, B.M., Al-Wadi, S. (2023). The Nexus of Intellectual Capital and Firm Performance: Evidence from Jordanian Pharmaceutical Companies. In: Yaseen, S.G. (eds) Cutting-Edge Business Technologies in the Big Data Era. SICB 2023. Studies in Big Data, vol 136. Springer, Cham. https://doi.org/10.1007/978-3-031-42455-7_16

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