Investigating the Relationship between Intellectual Capital and Financial Performance in Cement Sector firms in Pakistan
The study examines the relationship between intellectual capital performance and financialperformance of cement sector firms listed on Pakistan stock exchange. The study has been conducted using human capital, structural capital and relational capital as the determinants of intellectual capital and return on assets as the proxy of financial performance. The study applies random sampling technique for 20 cement sector firms for the period 2007 to 2016. The study uses correlation and simple OLS to test the hypothesis. The results reveal that intellectual capital as a composite and all its determinants i.e. human capital, structural capital and relational capital have positive significant impact on the financial performance of cement sector firms. The study has practical as well as theoretical implications. The results are expected to help policy makers to rehash their policies by encompassing the approaches that facilitate the intellectual capital of their firms. The study will also help researchers in strengthening their level of understanding of these relationships. Replication of the study may help to validate the hypothesized model and their consequent application in the organizations that share somewhat similar organizational structures.