Value Relevance of Intellectual Capital in Market Valuation of Nigerian Listed Services Firms

Abstract

This study investigated the value relevance of intellectual capital in the market valuation of listed services firms in Nigeria. This study adopted a quantitative panel research design, focusing on a population of 22 listed services firms in Nigeria across various NGX-classified sub-sectors from 2012 to 2023. The analysis was based on a balanced sample of 98 firm-year observations drawn from firms with consistent data availability. Specifically, it examined the effect of Human Capital, Relational Capital, and Structural Capital on Market Capitalisation using robust linear regression on panel data covering 2012 to 2023. The findings revealed that Human Capital and Structural Capital had positive and statistically significant impacts on market capitalisation, whereas Relational Capital exhibited an insignificant effect. Firm Size, used as a control variable, was also significantly associated with market value, while Leverage was not. The results underscore the critical role of internal intangible assets in enhancing firm valuation within the Nigerian services sector. Based on the findings, it is recommended that policymakers and corporate decision-makers in Nigeria strengthen corporate governance practices that promote the strategic development of human and structural capital. Additionally, service firms should adopt integrated reporting frameworks to better communicate the intangible value they create, particularly in human capability and operational infrastructure. A more consistent and value-based investment in relational capital may also be needed to convert external linkages into measurable financial outcomes.