Management Journal for Advanced Research

1. Introduction

Firm value remains a fundamental concern in corporate finance, strategic management and accounting research due to its central role in assessing organizational performance, financial stability and long-term sustainability. It does not only reflects shareholder wealth but also serves as a metric for evaluating managerial effectiveness, corporate governance standards and market competitiveness (Aregbeyen & Fasanya, 2023; Pulic, 2021). In recent years, the focus has shifted from tangible assets to intangible drivers of value, notably intellectual capital (IC), as a vital determinant of firm value (Mention & Bontis, 2022). Intellectual capital encompasses the collective knowledge, expertise and intangible assets within a firm that contribute to efficiency and sustained competitive advantage (Sveiby, 2023). In the face of dynamic business environments and increasing globalization, industrial firms must strategically manage intellectual capital to strengthen their market position and enhance firm value (Guthrie et al., 2024). Intellectual capital is traditionally categorized into three dimensions: human capital, structural capital and relational capital. Each plays a distinct role in value creation. Human capital refers to the knowledge, competencies, and experience embedded in a firm’s workforce. In the industrial goods sector, employee expertise is critical in improving production processes, ensuring quality control and driving product innovation (Subramaniam & Youndt, 2022). Firms that invest in continuous learning and talent retention often report superior operational outcomes, which positively impact firm value (Andriessen, 2022).

Structural capital, which includes organizational processes, patents, databases, technological infrastructure and institutional culture, supports the internal systems that facilitate knowledge application and efficiency (Youndt et al., 2021). In Nigerian industrial goods firms, strong structural capital enables operational optimization, reduces redundancy and ensures compliance with industry standards (Bozbura, 2023). Effective deployment of structural capital enhances resilience and long-term firm value, especially in a sector that faces intense competition and operational complexity (Bontis & Fitz-enz, 2022). Relational capital comprises the relationships and networks a firm cultivates with external stakeholders such as customers, suppliers,

Conversely, policy volatility or excessive compliance burdens may negate the benefits of intellectual capital, limiting its impact on firm performance (Egbunike & Odum, 2022). This study therefore aims to explore the moderating role of regulatory policies on the relationship between intellectual capital and firm value in Nigerian listed industrial goods firms. The findings are expected to offer empirical insights that inform corporate managers, policymakers and industry stakeholders on optimizing intellectual capital investment within the constraints of the regulatory environment. Aligning knowledge-based resources with conducive regulatory frameworks, firms can strengthen competitiveness, boost shareholder value and promote sustainable industrial development (Adebayo & Ojo, 2023; Onyema, 2023).

2. Literature Review

2.1.1 Concept of Firm Value

Firm value represents the overall worth of a company as perceived by investors and stakeholders. It encompasses financial performance, corporate governance, and intangible assets such as intellectual capital (Abubakar & Ibrahim, 2024; Olatunji et al., 2023). In Nigeria’s industrial goods sector, firm value is significantly influenced by macroeconomic volatility, fluctuating input costs, and regulatory interventions. For example, in 2023, the Central Bank of Nigeria’s monetary tightening and removal of fuel subsidies affected the operational costs and profit margins of listed industrial firms, resulting in valuation declines (CBN, 2023; Vanguard, 2023). Moreover, delayed policy implementation on import duty waivers and FX accessibility further strained the working capital of firms in the sector (Nwosu & Chukwuma, 2024).

2.1.2 Concept of Human Capital

Human capital, comprising employees’ skills, knowledge, and competencies, is essential for enhancing firm competitiveness and value creation. Recent studies emphasize its critical role in innovation, productivity, and firm sustainability across sectors, including manufacturing and industrial goods (Adegbite et al., 2023; Chukwu & Oyebanji, 2023). In Nigeria’s industrial goods sector, challenges such as an aging workforce, inadequate technical education, and managerial inefficiencies affect human capital development.

its effectiveness is often contingent on the stability, clarity and enforcement of regulations (Umar & Bello, 2023). For instance, inconsistent import regulations, tax policy reversals and overlapping agency mandates often dilute the positive impact of intellectual capital on firm performance within the industrial goods sector. Conversely, well-structured policies like the Revised National Policy on Industry, Trade and Investment (2022) have created an enabling environment for firms to leverage their intellectual resources effectively (Federal Ministry of Industry, 2022).

2.2 Empirical Review and Hypotheses Development

An empirical review is a critical examination of past studies that are based on observed and measured phenomena rather than theoretical assumptions (Creswell, 2014).

2.2.1 Human Capital and Firm Value

Zubair et al. (2024) applied machine learning to job market data to develop a dynamic measure of human capital inflow. Their approach emphasized both individual expertise and team synergies in firms operating in regulatory-intensive industries. The study revealed that these factors significantly enhance firm value, especially in environments with complex regulatory demands and where communication systems are robust. In a related study, Okonkwon et al. (2023) explored the impact of human capital on firm value using profitability as a mediating factor among listed industrial goods firms in Nigeria. They found that while human capital directly affects firm value, its impact on profitability was insignificant, suggesting that regulatory policies may indirectly influence this relationship through compliance and cost structures. Furthermore, Musa and Etim (2023) analyzed human capital efficiency in the Nigerian manufacturing sector, observing a negative relationship between efficiency metrics and firm growth, likely due to regulatory compliance burdens. However, employee growth measured by headcount and skill diversification positively influenced firm growth. They emphasized the need for policy-aligned training and workforce planning in highly regulated sectors.
H1: Human capital positively influences firm value under regulatory policy moderation.

Abdullahi and Okafor (2022) examined the mediating role of CSR in the relationship between relational capital and firm value. Their findings showed that CSR activities, particularly those mandated or encouraged by regulators, amplified the value of relational capital. In contrast, Rodríguez and Martínez (2021) emphasized that weak regulatory incentives for networking reduced the effectiveness of relational capital in enhancing firm value among SMEs in Europe, underscoring the global importance of policy alignment.
H3: Relational capital positively influences firm value under regulatory policy moderation.

2.3 Theoretical Framework: Dynamic Capabilities and Resource-Based View (RBV)

The Resource-Based View (RBV), introduced by Barney (1991), asserts that a firm’s sustainable competitive advantage is derived from its unique, valuable, rare, inimitable, and non-substitutable (VRIN) resources. In this context, intellectual capital comprising human, structural, and relational capital acts as a key intangible resource that improves firm value. The Dynamic Capabilities Theory, proposed by Teece, Pisano, and Shuen (1997), expands the RBV by focusing on a firm’s ability to adapt, integrate, and reconfigure resources in response to changing environments. In Nigeria's regulatory-intensive industrial goods sector, dynamic capabilities enable firms to leverage intellectual capital in compliance with policies such as environmental standards, taxation laws, and disclosure regulations. These capabilities allow firms to respond proactively to regulatory changes, enhancing resilience and long-term value creation. While RBV emphasizes what a firm possesses, Dynamic Capabilities focus on how firms utilize these resources under shifting policy environments. Together, they offer a robust framework for assessing how regulatory policies moderate the relationship between intellectual capital and firm value.

2.4 Research Framework

The research framework visually presents the interaction among key constructs. It positions regulatory policies as a moderating variable between the three components of intellectual capital (human, structural, and relational) and firm value, all within the Dynamic Capabilities framework, supported by the RBV theory (Sekaran & Bougie, 2013).

Table 1: Variables Measurement

Source: Previous Studies

3.1 Modelling the Moderating Role of Regulatory Policies

The following models were developed to examine both the direct and moderating effects:

Model 1: Baseline Relationship (Without Moderator)

FRMVALit=β0+β1HUMCAPit+β2STRCAPit+β3RELCAPit+β4FRMAGEit+εit\text{FRMVAL}_{it} = \beta_0 + \beta_1 \text{HUMCAP}_{it} + \beta_2 \text{STRCAP}_{it} + \beta_3 \text{RELCAP}_{it} + \beta_4 \text{FRMAGE}_{it} + \varepsilon_{it}FRMVALit​=β0​+β1​HUMCAPit​+β2​STRCAPit​+β3​RELCAPit​+β4​FRMAGEit​+εit​

Model 2: With Moderating Effect of Regulatory Policies

FRMVALit=β0+β1HUMCAPit+β2STRCAPit+β3RELCAPit+β4REGPOLit+β5(HUMCAPit×REGPOLit)+β6(STRCAPit×REGPOLit)+β7(RELCAPit×REGPOLit)+β8FRMAGEit+εit\text{FRMVAL}_{it} = \beta_0 + \beta_1 \text{HUMCAP}_{it} + \beta_2 \text{STRCAP}_{it} + \beta_3 \text{RELCAP}_{it}

Firm Value varies significantly, which may reflect firm size, industry segment, or market performance. The Regulatory Policies variable (REGPOL) averages 3.5 on a 5-point scale, reflecting a moderate level of regulatory oversight across the firms.

Table 3: Pearson Correlation Table

All forms of intellectual capital positively correlate with firm value. Regulatory policies also demonstrate strong positive correlation with firm value (r = 0.820), suggesting a potentially moderating role. This supports the assertion by Uyar et al. (2023) that regulatory clarity can enhance the effectiveness of intellectual resource deployment in industrial settings.

Table 4: Diagnostic Test Results

The data is suitable for regression analysis based on normality, absence of multicollinearity and homoscedasticity. While STRCAP shows relatively higher VIF (6.32), it's within acceptable limits.

Table 5: Moderated Multiple Regression Analysis – Industrial Goods Sector

ii. Firms should prioritize the adoption of advanced technologies, process automation, and robust knowledge management systems to strengthen structural capital and optimize operations.
iii. Effective stakeholder engagement, transparency in operations, and strategic partnerships should be pursued to enhance relational capital and foster long-term firm value.
iv. Policymakers are encouraged to formulate and implement regulatory policies that incentivize investments in intellectual capital and promote sustainable industrial development.
v. Firms should integrate intellectual capital strategies into their corporate governance frameworks to improve accountability, innovation, and overall performance.
vi. The significant moderating effect of regulatory policies found in this study suggests that firms operating under favorable regulatory conditions can better leverage their intellectual capital to enhance firm value. Hence, proactive compliance with and adaptation to regulatory frameworks is recommended.

4.5 Limitations and Suggestions for Future Studies

This study focused on the Nigerian listed industrial goods sector only and findings may not be directly applicable to other industries or geographic contexts. The analysis incorporated regulatory policies as a moderating variable, highlighting its role in enhancing or constraining the effect of intellectual capital on firm value. However, the scope was limited to a single sector and regulatory environment.

Future Research Should:

Extend this investigation across multiple sectors to evaluate cross-industry variations in the moderating role of regulatory policies.
Consider other potential moderating variables such as macroeconomic indicators, technological readiness and market competition.
Employ longitudinal data to observe the long-term effects of intellectual capital investments and evolving regulatory frameworks on firm value.
Explore the interaction between specific regulatory policies (e.g., local content laws, tax incentives, reporting standards) and the various components of intellectual capital.

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