Investigating and analyzing the impact of IC on the profitability of companies listed on the Iraqi stock exchange

Abstract

Companies need to follow a continual strategy of knowledge improvement and innovation to maintain their competitive advantage in the face of rapid technological advances and global competition. This method, known as intellectual capital (IC), aids businesses in keeping their edge in the market. Managers should pay attention to IC because of this reason. This study looked at how IC affected the bottom line of a company listed on the ISE in Iraq. The study studied data from a subset of the ISE-listed manufacturers throughout the span of ten years, from 2010 to 2019. Multivariate regression, as well as the F-Limer, Chow, and Hausman tests, were used to examine the data. It was shown that IC improved both ROA and ROE. The results also showed that the capital added value coefficient (COAV) positively impacted ROA but had no discernible impact on ROE. Moreover, ROA and ROE were found to be positively impacted by structural capital's coefficient of added value COAV. And while it had little impact on ROA, the added value coefficient (AVC) of human capital (HC) had a positive and large impact on ROE.