IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0295321.html
   My bibliography  Save this article

Does intellectual capital efficiency measured by modified value-added intellectual coefficient affect the financial performance of insurance companies in Ethiopia?

Author

Listed:
  • Samuel Godadaw Ayinaddis
  • Habtamu Getachew Tegegne
  • Nitsuh Alemayehu Belay

Abstract

Insurance company managers and shareholders should be conscious of the effect of intellectual capital efficiency and its components on financial performance. The purpose of this study is to examine the role of intellectual capital efficiency and its components on the financial performance of insurance companies. To achieve study objectives Modified value-added intellectual coefficient is adopted to measure the effect of intellectual capital efficiency. The study adopted an explanatory research design with an arrangement of secondary data analysis via document analysis, quantitative approach, and deductive method of inquiry. Panel data was used with a sample of 14 insurance companies from 2012–2022. Descriptive and regression analyses were performed to analyze the data using STATA version 15.0. Econometric model estimation procedures and multiple regression assumptions were tested accordingly. The random effect regression result revealed that the value-added intellectual capital and its component human capital and capital employed efficiency have a positive significance association with financial performance. Whereas, relational capital efficiency and structural capital efficiency do not have a significant contribution to the financial performance of insurance sectors in Ethiopia. The findings of this study contribute to the theoretical and practical understanding of the relationship between intellectual capital efficiency and financial performance in the context of insurance companies in Ethiopia.

Suggested Citation

  • Samuel Godadaw Ayinaddis & Habtamu Getachew Tegegne & Nitsuh Alemayehu Belay, 2024. "Does intellectual capital efficiency measured by modified value-added intellectual coefficient affect the financial performance of insurance companies in Ethiopia?," PLOS ONE, Public Library of Science, vol. 19(1), pages 1-15, January.
    • Handle: RePEc:plo:pone00:0295321
    DOI: 10.1371/journal.pone.0295321
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0295321
    Download Restriction: no
    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0295321&type=printable
    Download Restriction: no
    File URL: https://libkey.io/10.1371/journal.pone.0295321?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Cheng Hsiao, 2007. "Panel data analysis—advantages and challenges," TEST: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 16(1), pages 1-22, May.
    2. Ihyaul Ulum & Rizqiyah & Ahmad Waluya Jati, 2016. "Intellectual Capital Performance: A Comparative Study between Financial and Non-Financial Industry of Indonesian Biggest Companies," International Journal of Economics and Financial Issues, Econjournals, vol. 6(4), pages 1436-1439.
    3. Santi Gopal Maji & Mitra Goswami, 2017. "Intellectual capital and firm performance in India: a comparative study between original and modified value added intellectual coefficient model," International Journal of Learning and Intellectual Capital, Inderscience Enterprises Ltd, vol. 14(1), pages 76-89.
    4. Ihyaul Ulum & Noviar Kharismawati & Dhaniel Syam, 2017. "Modified value-added intellectual coefficient (MVAIC) and traditional financial performance of Indonesian biggest companies," International Journal of Learning and Intellectual Capital, Inderscience Enterprises Ltd, vol. 14(3), pages 207-219.
    5. Valentina Flamini & Miss Liliana B Schumacher & Mr. Calvin A McDonald, 2009. "The Determinants of Commercial Bank Profitability in Sub-Saharan Africa," IMF Working Papers 2009/015, International Monetary Fund.
    6. Radiojecic, Tamara & Krstic, Bojan, 2017. "Intellectual Capital in the Theory of the Firm," Ekonomika, Journal for Economic Theory and Practice and Social Issues, Society of Economists Ekonomika, Nis, Serbia, vol. 63(4), December.
    7. Nicholas Asare & Abdul Latif Alhassan & Michael Effah Asamoah & Matthew Ntow-Gyamfi, 2017. "Intellectual capital and profitability in an emerging insurance market," Journal of Economic and Administrative Sciences, Emerald Group Publishing Limited, vol. 33(1), pages 2-19, May.
    8. Tasawar Nawaz & Roszaini Haniffa, 2017. "Determinants of financial performance of Islamic banks: an intellectual capital perspective," Journal of Islamic Accounting and Business Research, Emerald Group Publishing Limited, vol. 8(2), pages 130-142, April.
    9. Nikolaos G. Theriou & Vassilis Aggelidis & Georgios N. Theriou, 2009. "A Theoretical Framework Contrasting the Resource-Based Perspective and the Knowledge-Based View," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 177-190.
    10. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    11. Adelaide Wilcox King & Carl P. Zeithaml, 2001. "Competencies and firm performance: examining the causal ambiguity paradox," Strategic Management Journal, Wiley Blackwell, vol. 22(1), pages 75-99, January.
    12. Constance E. Helfat & Margaret A. Peteraf, 2003. "The dynamic resource‐based view: capability lifecycles," Strategic Management Journal, Wiley Blackwell, vol. 24(10), pages 997-1010, October.
    13. Cheng Hsiao, 2007. "Rejoinder on: Panel data analysis—advantages and challenges," TEST: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 16(1), pages 56-57, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Muhammad Mahmood Shah Khan & Farrukh Ijaz & Ejaz Aslam, 2014. "Determinants of Profitability of Islamic Banking Industry: An Evidence from Pakistan," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 6(2), pages 27-46, October.
    2. Samuel Godadaw Ayinaddis & Habtamu Getachew Tegegne, 2023. "Uncovering financial distress conditions and its determinant factors on insurance companies in Ethiopia," PLOS ONE, Public Library of Science, vol. 18(10), pages 1-15, October.
    3. Ahmed Jinjiri Bala & Aminu Hassan & Muhammad Liman Muhammad, 2024. "Do board characteristics matter in the relationship between intellectual capital efficiency and firm value? Evidence from the Nigerian oil and gas downstream sector," Future Business Journal, Springer, vol. 10(1), pages 1-24, December.
    4. Mila Austria Reyes & Monika Kussetya Ciptani & Teuku Ismail Fahmi, 2025. "Intellectual Capital Effects on Firm’s Profitability with Industry Types as Moderating Variable," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(1), pages 3390-3405, January.
    5. Hany Eldemerdash & Hugh Metcalf & Sara Maioli, 2014. "Twin deficits: new evidence from a developing (oil vs. non-oil) countries’ perspective," Empirical Economics, Springer, vol. 47(3), pages 825-851, November.
    6. Dinko Herman BOIKANYO, 2024. "Utilization Of 4ir Technologies To Enhance Strategic Intelligence And Dynamic Capabilities For A Sustainable Competitive Advantage," Business Excellence and Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 14(1), pages 5-24, March.
    7. Ding Luo & Oded Cats & Hans Lint, 2020. "Can passenger flow distribution be estimated solely based on network properties in public transport systems?," Transportation, Springer, vol. 47(6), pages 2757-2776, December.
    8. Marcos Carchano & Inmaculada Carrasco & Angela González, 2025. "Examining environmental proactivity in the Spanish wine industry: The moderating role of size," Agribusiness, John Wiley & Sons, Ltd., vol. 41(1), pages 127-157, January.
    9. Li, Larry & McMurray, Adela & Sy, Malick & Xue, Jinjun, 2018. "Corporate ownership, efficiency and performance under state capitalism: Evidence from China," Journal of Policy Modeling, Elsevier, vol. 40(4), pages 747-766.
    10. repec:ehu:cuader:33232 is not listed on IDEAS
    11. Dzintra Atstāja & Edmira Cakrani, 2024. "Impact of Climate Change on International Tourism Evidence from Baltic Sea Countries," Sustainability, MDPI, vol. 16(12), pages 1-16, June.
    12. Lynn, Peter & Bosch, Oriol, 2021. "Methodological lessons from the pilot longitudinal survey on debt advice," ISER Working Paper Series 2021-03, Institute for Social and Economic Research.
    13. Kibeshi Kiyabo & Nsubili Isaga, 2019. "Strategic entrepreneurship, competitive advantage, and SMEs’ performance in the welding industry in Tanzania," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 9(1), pages 1-23, December.
    14. Yasser Razak Hussain & Pranab Mukhopadhyay, 2023. "How Much do Education, Experience, and Social Networks Impact Earnings in India? A Panel Data Analysis Disaggregated by Class, Gender, Caste and Religion," SAGE Open, , vol. 13(4), pages 21582440231, December.
    15. Samadhiya, Ashutosh & Yadav, Sanjeev & Kumar, Anil & Majumdar, Abhijit & Luthra, Sunil & Garza-Reyes, Jose Arturo & Upadhyay, Arvind, 2023. "The influence of artificial intelligence techniques on disruption management: Does supply chain dynamism matter?," Technology in Society, Elsevier, vol. 75(C).
    16. Fosso Wamba, Samuel & Queiroz, Maciel M. & Trinchera, Laura, 2024. "The role of artificial intelligence-enabled dynamic capability on environmental performance: The mediation effect of a data-driven culture in France and the USA," International Journal of Production Economics, Elsevier, vol. 268(C).
    17. Thierry Sauvage & Tony Cragg & Sarrah Chraibi & Oussama El Khalil Houssaini, 2018. "Running the Machine Faster: Acceleration, Humans and Warehousing," Post-Print hal-02905068, HAL.
    18. Trabelsi, Emna & Hichri, Walid, 2021. "Central Bank Transparency with (semi-)public Information: Laboratory Experiments," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 90(C).
    19. Mahavarpour, Nasrin & Marvi, Reza & Foroudi, Pantea, 2023. "A Brief History of Service Innovation: The evolution of past, present, and future of service innovation," Journal of Business Research, Elsevier, vol. 160(C).
    20. Noor Zainab.Tunggal & Shariff Umar Shariff Abd. Kadir & Venus-Khim Sen Liew, 2018. "Panel Analysis of Monetary Model of ASEAN-5 Exchange Rates," International Business Research, Canadian Center of Science and Education, vol. 11(11), pages 1-7, November.
    21. Wanglin Ma & Kathryn Bicknell & Alan Renwick, 2019. "Feed use intensification and technical efficiency of dairy farms in New Zealand," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(1), pages 20-38, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:plo:pone00:0295321. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: plosone (email available below). General contact details of provider: https://journals.plos.org/plosone/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.