Intellectual Capital, Climate Risk and Financial Performance: Firm Level Analysis
Abstract
This paper aims to study the impact of firms' internal and external factors on their performance by applying the two-step system GMM model for 2009-2019. The findings empirically prove that internal factors-the components of the value-added intellectual coefficient (VAIC™): Structural Capital Efficiency (SCE) and Capital Employed Efficiency (CEE) have a significant positive impact on performance. While Human Capital Efficiency (HCE) has an insignificant impact on performance. External factors included in this study are industry concentration, and climate risk. The climate risk significantly negatively impacts firm performance, while the impact of industry concentration is insignificant. These findings support the Resource-Based View (RBV) and are robust to using different measures of the same explanatory variables. The results are helpful for stakeholders, including investors, managers, regulators, policymakers, etc., to make better and well-informed decisions.
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