Strategic assets, corporate governance and firm performance: a study on an emerging economy

Abstract

This study examines the impact of intellectual capital (IC) as a strategic asset and corporate governance on firm performance in Bangladesh's manufacturing sector from 2018 to 2024. Utilizing an unbalanced panel of 101 listed firms (678 firm-year observations), the analysis employs the Value Added Intellectual Coefficient (VAIC) model and a two-step system GMM estimator to address endogeneity. The findings reveal that intellectual capital efficiency has a significant positive effect on Return on Assets (ROA), underscoring its role as a key driver of operational performance. However, this relationship is not consistently observed for Return on Equity (ROE). Furthermore, institutional ownership strengthens firm performance, while board independence negatively moderates the IC-performance link. The study concludes that intellectual capital is a critical strategic resource, but its effectiveness is contingent on specific governance structures and the chosen performance metric.