Intellectual Capital and Its Impact on the Financial Performance: Evidence from Palestine

The study aimed to explore the impact of intellectual capital on the financial performance of corporations listed on the Palestine Exchange. The analytical approach was used in this study to examine the financial statements of these corporations during the period from 2017 to 2022. Data was collected from the annual financial reports of the listed companies. The study population consist of all 43 companies listed on the Palestine Exchange which regularly disclosed their financial and sustainability reports, distributed across various economic sectors. Data extracted from the financial statements was processed using the statistical package program SPSS, using multiple regression analysis to examine the impact of intellectual capital in its three dimensions: human capital, structural capital, and relational capital, on financial performance indicators represented by return on assets, return on equity, and net profit ratio. A clear relationship was found between the components of intellectual capital and the financial performance of public shareholding companies on the Palestine Exchange. It was also found that intellectual capital, in its various dimensions, has a significant impact on return on assets, return on equity, and net profit margin. Intellectual capital in the banking sector had the greatest impact on financial performance compared to other sectors.