Abstract:
Traditional financial performance metrics have served well
throughout the inclusion era, but they are no longer in sync with the
skills and competitiveness that organizations are attempting to learn.
This study examined the role of intellectual capital disclosure (ICD) in
mediating the relationship between financial performance and firm
value. The sample consists of 39 firms listed on the Nairobi Securities
Exchange (NSE) in Kenya. They represent 67% of firms listed on NSE
during the period (2010–2022). Data were extracted from individual
companies’ audited annual reports. The study hypotheses were tested on
a fixed and random effects model with the aid of the Stata student
version. The results reveal that financial performance has a positive and
significant effect on firm value. Furthermore, financial performance has
a negative effect on ICD. Finally, ICD was found to have a mediating
effect on the relationship between financial performance and firm value.
The results confirm that intellectual capital disclosure is an important
mediator in the relationship between financial performance and firm
value; firm managers should use ICD as a winning edge. Additionally,
firms with high intellectual capital are likely to engage in voluntary
disclosure to legitimize their success
