Intellectual capital and financial performance of Kenyan state corporations

Abstract

Intellectual Capital is combination of the Intellectual property (IP) held by a business and the people in that business that can exploit and increase it. The main issue the study aimed to investigate was Intellectual Capital and Financial Performance of Kenyan State Corporations. The study main objective was to determine how intellectual capital affects the financial performance of Kenyan state corporations. The study adopted a descriptive research design in investigating the concept of intellectual capital and financial performance of Kenyan state corporations. The target population for the study was formed by the total number of parastatals currently operating in Kenya which is 192. The study applied a census method to sample the respondents and therefore the study targeted all the 192 parastatals who were the respondents. The study used primary data which was collected through self-administered questionnaires. The data collected was analyzed using SPSS version 16 and presented using descriptive statistics and inferential statistics. Multiple regression analysis technique was used to determine the effect of independent variables on the dependent variable. The findings of the study indicate that the company culture which contains valuable practices of conducting business is the major benefit resulting from organizational intellectual capital. The findings also indicated that employees being very highly skilled in their jobs as the major way of human capital to improve the firm’s performance. The study concluded that organizations should update their database promptly to enable utilization of organizational capital to spur performance; organizations should strive to ensure that their employees are considered the best in the industry as a way of utilizing human capital and hence spurring firm’s performance and organizations should take part in corporate social responsibility activities as a way of social capital initiative which will create goodwill and thereby spurring the firm’s performance