Application of the Value added Intellectual coefficient to Measure Corporate Performance: Evidence from Nigerian Service Comoanies

Abstract

This research work applies a new accounting method for measuring the “value creation” efficiency of company, the Value Added Intellectual Coefficient (VAIC) of Pulic. It also investigates the correlation between VAIC components and corporate performance, based on 2010 annual reports of 20 Nigerian listed service companies. After modifying the model, the findings show that the VAIC components had significant positive correlation with profitability (ROA) and market value (MV), and a negative correlation with productivity (ATO). Furthermore, the findings of the study suggest that service companies in Nigeria are capable of transforming intangible (intellectual) resources/assets to high value added service, as claimed by Public (2002).