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Business strategy, intellectual capital, firm performance, and bankruptcy risk: evidence from Oman's non-financial sector companies

Tamanna Dalwai (Business and Accounting, Muscat College, Muscat, Oman)
Mahdi Salehi (Ferdowsi University of Mashhad, Mashhad, Iran)

Asian Review of Accounting

ISSN: 1321-7348

Article publication date: 3 August 2021

Issue publication date: 13 August 2021




This research examines the influence of business strategy and intellectual capital on firm performance and bankruptcy risk of Oman's non-financial sector companies.


The data comprises 380 firm-year observations collected from 2015 to 2019 for the non-financial sector companies listed on the Muscat Securities Market. This study measures business strategy using the Miles and Snow typologies and Porter's strategies as alternative measures. The study uses the Granger-causality test to measure the bi-directional causality between independent and dependent variables. The authors use alternative measurements of business strategy and 2SLS/IV estimation to validate the OLS results.


According to the Miles and Snow typologies, most of Oman's non-financial firms were analyzers. The empirical results show a negative relationship between business strategy and return on equity (ROE), suggesting defender-type strategy leads to an increase in firm performance. The OLS results show no influence of A-VAIC on firm performance and Altman-Z score. The structural capital efficiency is positively associated with ROA, and Altman Z score consistent with the hypothesized relationship. The Granger causality test shows no inference of causality between any independent and dependent variables except for Z score and CEE.

Research limitations/implications

The business strategy results from the firm performance and bankruptcy risk models are valuable to the researchers from an emerging market and non-financial companies' perspective. Oman's diversification strategy of its economic activities through non-financial sector companies receives an impetus through the findings of this study. As this study is limited to Oman's non-financial sector companies, future research on business strategy impact can be extended to the financial sector, other GCC, and emerging countries.


The findings of this study contribute to the sparse literature on business strategy in an emerging market like Oman. This study enriches the knowledge of business strategy typologies proposed by Miles and Snow, and Porter. It also contributes to the extant literature on firm performance and bankruptcy risk.



The authors are grateful to Assoc. Prof. Linna Shi (Associate Editor) and the anonymous reviewers for their helpful comments and feedback.


Dalwai, T. and Salehi, M. (2021), "Business strategy, intellectual capital, firm performance, and bankruptcy risk: evidence from Oman's non-financial sector companies", Asian Review of Accounting, Vol. 29 No. 3, pp. 474-504.



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