DO INTANGIBLE ASSETS DRIVE CORPORATE FINANCIAL POLICIES? EVIDENCE FROM PAKISTAN

Abstract

This study examines how intangible assets, particularly intellectual capital efficiency, influence corporate financial policy, focusing specifically on dividend policy in Pakistani high-tech companies while utilizing the Modified Value Added Intellectual Coefficient to measure intellectual capital efficiency. This research uses two-step System GMM analysis to study the relationship between dividend policy and the ICE measured by MVAIC using firm-level data from 2013 to 2023. The findings from empirical research shows that overall ICE measured by MVAIC establishes an affirmative and statistically substantial relationship with dividend policy. The evidence fits the theoretical framework of Resource-Based View (RBV) together with Signaling Theory which confirms that efficient intellectual capital enables companies to produce lasting earnings and enhance their capacity to distribute dividends. The research findings demonstrate that policy makers together with corporate leaders should invest in human capital and structural assets and employed resources to enhance dividend distribution practices. Future research should conduct sector-wide investigations across diverse geographic regions.