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Board governance, intellectual capital and firm performance

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  • Stephen Korutaro Nkundabanyanga

Abstract

Purpose - – The purpose of this paper is to examine the relationship between the combined (multiplicative) effect of board governance and intellectual capital (IC) on firm performance. Design/methodology/approach - – This study is cross-sectional and follows a positivist view of testing pre-specified hypotheses. The study uses a respondent sample of 128 service firms operating in Kampala, directors or managers are the unit of enquiry. Structural equation modelling with analysis of moment structures is used for statistical modelling. Findings - – Board governance and IC make significant contributions to firm performance. However, their interaction is a significant booster to services sector firms’ performance in Uganda. Research limitations/implications - – Although an attempt is made at controlling for common method variance in particular by proactive instrument design and testing, and usage of the Harman single factor analytical technique, its influence may not have been dealt away completely owing to failure to obtain a plausible common marker variable. Well, it is meaningful to identify the significant positive multiplicative effects of board governance and IC so as uncover what is needed in service firms to improve their performance. Originality/value - – Studies explaining firm performance via board governance only and which ignored the synergistic effects of board governance and IC have often missed the reality that the performance of the firm can significantly be improved by means of leveraging IC while simultaneously calling for effective board governance.

Suggested Citation

  • Stephen Korutaro Nkundabanyanga, 2016. "Board governance, intellectual capital and firm performance," Journal of Economic and Administrative Sciences, Emerald Group Publishing Limited, vol. 32(1), pages 20-45, May.
    • Handle: RePEc:eme:jeaspp:v:32:y:2016:i:1:p:20-45
    DOI: 10.1108/JEAS-09-2014-0020
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    Citations

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    Cited by:

    1. Mostafa A. Ali & Nazimah Hussin & Hossam Haddad & Nidal Mahmoud Al-Ramahi & Tareq Hammad Almubaydeen & Ibtihal A. Abed, 2022. "The Impact of Intellectual Capital on Dynamic Innovation Performance: An Overview of Research Methodology," JRFM, MDPI, vol. 15(10), pages 1-28, October.
    2. Farzaneh Nassirzadeh & Davood Askarany & Solmaz Arefi-Asl, 2023. "The Relationship between Changes in Corporate Governance Characteristics and Intellectual Capital," JRFM, MDPI, vol. 16(2), pages 1-19, February.
    3. Richard Akisimire & Ernest Abaho & Maureen Tweyongyere, 2020. "CEO Duality and Financial Performance: Testing the Moderating Role of Firm Age: Evidence from a Developing Economy," Journal of Economics and Behavioral Studies, AMH International, vol. 12(3), pages 53-64.
    4. Lawrence Musiitwa Kyazze & Isaac Nabeta Nkote & Juliet Wakaisuka-Isingoma, 2017. "Cooperative governance and social performance of cooperative societies," Cogent Business & Management, Taylor & Francis Journals, vol. 4(1), pages 1284391-128, January.
    5. Nikolić Jelena & Nielsen Jelena Erić & Peković Jelena, 2022. "Board Structure and Bank Performance: The Mediating Role of Intellectual Capital," Naše gospodarstvo/Our economy, Sciendo, vol. 68(2), pages 28-42, June.
    6. Richard Akisimire & Muhsin Salim Masoud & Mutahyoba D Baisi & Laura A Orobia, 2016. "Board Member Age Diversity and Financial Performance of Manufacturing Firms: A Developing Economy Perspective," Journal of Economics and Behavioral Studies, AMH International, vol. 8(5), pages 120-132.
    7. Lasuli Bakalikwira & Juma Bananuka & Twaha Kaawaase Kigongo & Doreen Musimenta & Veronica Mukyala, 2017. "Accountability in the public health care systems: A developing economy perspective," Cogent Business & Management, Taylor & Francis Journals, vol. 4(1), pages 1334995-133, January.
    8. Peng Xu & Guiyu Bai, 2019. "Board Governance, Sustainable Innovation Capability and Corporate Expansion: Empirical Data from Private Listed Companies in China," Sustainability, MDPI, vol. 11(13), pages 1-17, June.

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