Information and Knowledge Management www.iiste.org ISSN 2224-5758 (Paper) ISSN 2224-896X (Online) Vol.8, No.9, 2018 13 Impact of Intellectual Capital on Financial Performance of Listed Nigerian Oil Marketing Companies Godwin Emmanuel Oyedokun * Babale Saidu Department of Accounting, Faculty of Administration, Nasarawa State University, Keffi Nasarawa State, Nigeria Abstract Intellectual capital plays an important role in every company regardless of nature and the environment its operates, in the sense that, investment in human capital development is considered to be important than in physical and financial asset despite the fact that such expenditure is not expressed in monetary term but in narrative form especially in Chairman’s statement. Therefore, this study examined the impact of intellectual capital on the financial performance of the listed Nigeria oil marketing companies. The study’s period spanned through 10 years 2007 - 2016. Intellectual capital was measured by the market to book value ratio (MB), Value Added intellectual coefficient (VAIC), and monetary model of Tobin’s Q (MMQR) while the financial performance was measured by return on asset (ROA). The ex-post facto research design was adopted while data was extracted from the firms’ financial statements. Multiple regression analysis was used to ascertain the impact of intellectual capital on financial performance. From the result, it was discovered that market to book value has a negative significant impact on return on asset. Monetary model of Q Tobin’s has an insignificant impact on return on asset while Value added intellectual coefficient also has an insignificant impact on return on asset. The study, therefore, recommended that the listed Nigerian oil marketing companies should strive to boost the value of their intellectual assets for its ultimate effect on ROA through maximization of their market value, maximization of Intellectual Capital return and more investment in Intellectual Capital components, particularly human, structural and relational capital. More attention should be given to the human side of the intellectual capital and reliance should not strictly be focused on the numeric evaluation and improvement. Also, standard on intellectual capital accounting is issued by the International Financial Reporting Committee (IFRC) to enable firm’s measure and record their intellectual capital values as they relate to financial performance in their income statements which will invariably improve company performance. Keywords: Accounting, Financial performance, Financial reporting, Intellectual capital, Tobin Q 1. INTRODUCTION Intellectual capital is nowadays important in every company regardless of its size or complexity and can help to increase the company’s value added. The importance is so paramount that companies invest more in this asset than in physical and financial assets. As customer demand innovative goods and services that can satisfy their need as well as have value for their money, that is why manager and employers of labour are devoting more attention and resources towards enhancing potentials on the area of human, structural and relational capital in order to satisfy those needs and achieve competitive edge in marketplace. Additionally; companies recently paid more attention to intellectual capital which it refers to as hidden and intangible resources of an organization that cannot be fully captured by traditional accounting reports (Chu, Lin, Yu, Hsiung & Liu, 2006). Petroleum marketing companies are companies that engaged in storage and transportation of oil, refining and hydroprocessing, marketing and distribution of oil, gas and its derivatives (Kantudu & Samaila, 2015), are not left out in the race for achieving competitive edge; as the industry over the years witnessed what can be termed as giant stride investments in human, structural and relational capital, as drivers of firm value in modern competitive environments lie in a firm’s intellectual resources than its physical and financial capital. Although intellectual capital has been considered an an essential resource especially in an environment where the source of outstanding financial performance is known and other intangible resources; conservative accounting practices as revealed by Chen, Cheng and Hwang (2005) restrain firms’ investment in intellectual capital from being present in financial statements. For instance, a study conducted by Okwy and Christopher (2010) (as cited in Tayib and Salman, 2011) revealed that investments in local and overseas training and development of employees by Nigerian Breweries Plc and Unilever in 2006 are N88 and N40 millions respectively. This is in addition to same investment by Wema Bank Plc, and construction of Access University of Banking Excellence by Access Bank Plc in 2007. These gigantic investments are nowhere to be found in the statement of financial position of these companies; as there has not been any specific accounting standard on Intellectual Capital and its reporting in Nigeria. Because SAS 22 issued in June 2006 by NASB now Financial Reporting Council (FRC) was on research and development cost, and IAS 38 by International Accounting Standard Board (IASB) addressed intangible assets generally. Also, Chevron (now MRS) sponsored training and development courses for its 118 employees in 2007; this was complemented by other programmes such as New to Chevron, people leadership and leading workgroup with a view to developing its intellectual assets. In line with patterns over the years, investment in quality staff