Does structural capital count in human capital-corporate financial performance relationship? Evidence from deposit money banks in Nigeria

Purpose The purpose of this paper is to explore human capital and corporate financial performance link from the perspective of human capital theory, resources-based view and balanced score card approach, and the mediating role of structural capital in this relationship. Design/methodology/approach Overall, a data set was drawn from five-year annual reports of deposit money banks (DMBs) in Nigeria. Additionally, the bootstrap procedure was performed to test the mediating role of structural capital. Findings Specifically, the paper results indicate that whereas human capital has significant positive effect on corporate financial performance and structural capital, structural capital has significant positive effect on corporate financial performance. Additionally, the study finds structural capital to mediate the effect of human capital on organizational financial performance. Research limitations/implications This paper focused on 12 DMBs in Nigeria and their five year annual reports. Accordingly, future studies in this area should increase the number of banks and years, and include firms operating in insurance, manufacturing, telecommunication and oil and gas industries to permit comparability of results and broader basis for generalizability. Moreover, the study results provide insights that would serve as robust empirical basis for policy makers to insist on enhancement of the value of human and structural capital variables. Practical implications The managers of DMBs should commit to development of their employees through improvement in their training and health programs, among others. Also, they should ensure continuous improvement of their structural capital to enable the investments in their employee to translate to enhanced corporate financial performance. Originality/value To the best of the author’s knowledge, this is the first study to explore the mediation effect of structural capital on the human capital-corporate financial performance link using evidence from DMBs in Nigeria and, thus, extends and deepens extant literature on human capital-organizational performance nexus.