DO BOARD GOVERNANCE MECHANISMS INFLUENCE THE INTELLECTUAL CAPITAL–PERFORMANCE RELATIONSHIP? EVIDENCE FROM AN EMERGING ECONOMY

Year 2025, Volume: 14 Issue: 2 , 177 - 189 , 31.12.2025

Asia Khatun Raihan Sobhan Shafera Siddique Aapan

https://izlik.org/JA49JM27EX

Abstract

Purpose- This study examines the influence of intellectual capital (IC) on firm performance and the moderating role of board governance
mechanisms in the context of Bangladesh, an emerging economy.
Methodology- Using panel data from 100 non-financial firms listed on the Dhaka Stock Exchange over 2018–2023, IC efficiency is measured
through the Modified Value-Added Intellectual Capital (MVAIC) model, while firm performance is assessed using return on assets and Tobin’s
Q.
Findings- The findings demonstrate that IC efficiency positively and significantly enhances firm performance, with human capital, structural
capital, and capital employed efficiency being key drivers. Moreover, board characteristics, particularly board size, independence, and
meeting frequency, significantly strengthen the IC–performance relationship. Earnings per share (EPS) and the price–earnings (P/E) ratio are
additionally employed as alternative measures of firm performance to verify the robustness of the observed relationship.
Conclusion- The results highlight the importance of effective board governance in maximizing the benefits of IC. For managers and
policymakers in emerging economies, strengthening board mechanisms and governance practices can enhance firm performance by ensuring
better utilization of intangible assets. This is one of the pioneer studies to investigate the moderating role of board governance mechanisms
in the IC–performance nexus within an emerging economy like Bangladesh. By employing the MVAIC model, it offers novel evidence on how
board attributes shape the effectiveness of IC in an emerging economy context.

Keywords

Intellectual capital , firm performance , board characteristics , emerging economy , modified value added intellectual capital

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