The effect of financial crisis on the relationship between intellectual capital and financial performance in the European context

Abstract

The current paper aims to analyse the effect of financial crisis on the relationship between intellectual capital and financial performance in the European context. Based on a sample of non-financial listed firms of four European countries where the effect of financial crisis were more evident for the period between 2005 and 2015, we use dynamic panel estimators, specifically the GMM system (1998). Results suggest that intellectual capital investments have a positive impact on firms’ financial performance in the short and long run. The results obtained enhance the role of intellectual capital for the financial performance of firms, since it has a positive effect on the performance. Furthermore, financial crisis affected negatively the relationship between intellectual capital and financial performance. Suggestions are made for practitioners and policy-makers.