Does intellectual capital efficiency matter for banks’ performance and risk-taking behavior?

Zheng, Chao; Islam, Md. Nazmul; Hasan, Najmul; Halim, Md. Abdul

doi:10.1080/23322039.2022.2127484

Cited by 15 publications

(7 citation statements)

References 95 publications

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“…Vietnamese commercial banks were examined by the authors of [51], who came to the conclusion that there was a positive association between I.C and the efficiency of the banks' total cost, purely technical, and allocative functions. In their investigation of Bangladeshi banks, the authors of [52] discovered that while SC and RC exhibit a positive relationship, HC is negatively related to banks' performance and risk-taking behavior.…”

Section: Intellectual Capital and Firm Performancementioning

confidence: 99%

Investigating the Impact of Intellectual Capital on the Sustainable Financial Performance of Private Sector Banks in India

Barak

Sharma

2023

Sustainability

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The study aims to investigate the impact of intellectual capital (I.C) on the sustainable financial performance (F.P) of private sector banks (PSBs) in India. Data were gathered from 17 banks between 2010 and 2021 using Prowessiq (CMIE) and their annual financial reports. To evaluate the ways in which intellectual capital (I.C) affects sustainable financial performance (F.P), the modified value-added intellectual coefficient (MVAIC) methodology was applied. The human capital (HC), capital employed (CE), structural capital (SC), and relational capital (RC) were utilized as independent factors together with three control variables (leverage, size, and GDP), the return on capital employed (ROCE), and return on equity (ROE), which were used as dependent variables. The results show that RC and SC have a clear, statistically significant relationship with ROCE. Additionally, HC and CE have a direct positive and statistically significant effect on ROE. Overall, all of the I.C. components have significant impacts in increasing the efficiency and profitability of Indian private sector banks. Furthermore, the total intellectual capital (MVAIC) exhibits a statistically significant negative association with ROE but a substantial positive association with ROCE. It is advised that policymakers and managers focus more on the various I.C components because they are the key engines generating value for the banks in order to preserve a more sustainable F.P.

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Section: Intellectual Capital and Firm Performancementioning

confidence: 99%

Investigating the Impact of Intellectual Capital on the Sustainable Financial Performance of Private Sector Banks in India

Barak

Sharma

2023

Sustainability

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“…Risk, Financial Stability, andEconomic Growth Zheng et al (2022), in a study conducted with Bangladeshi banks, discovered a statistically significant negative sign (0.019, 0.032) between GGDP and NPL. They found a significant negative sign between inflation and NPL (Zheng et al 2022). There is a significant and inverse relationship between NPL and GGDP, shown by the coefficient of GGDP.…”

Section: Competition and Ownership Structurementioning

confidence: 94%

The Nexus of Banks’ Competition, Ownership Structure, and Economic Growth on Credit Risk and Financial Stability

et al. 2023

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The main object of this research is to find out the nexus of banks’ competition, ownership structure, and economic growth on credit risk and financial stability. In addition, it examines the level of financial stability, economic growth, and ownership structure in the Middle East and North African (MENA) economies. The generalized method of moments (GMM) method was used to examine this study. The study used an unbalanced panel dataset from 2011 to 2021 in MENA countries. This research demonstrates a negative relationship between economic growth, credit risk, and financial stability in MENA economies; nevertheless, it proves an insignificant effect among them. It also shows that the lower the level of bank competition, the lower the level of bank risk taking, and the better the level of financial stability. It further found that market competition and bank ownership structure had a homogenous effect on financial stability when looking at the impact of competition and bank ownership structure. In the long-term sense, the square term of competition is highly favorable with financial stability models ((Lerner square × Islamic banks), (Lerner square × commercial banks), (Lerner square × specialized government institutions)). However, financial stability improves with time, as seen by the competition square term bank ownership structure (a square measure of competition) with the Lerner index (LI) and the Herfindahl–Hirschman index total assets (HHIA). This finding of the square measure of competition is supported by competition stability theory. However, this study also proved that Islamic and commercial banks are less vulnerable to credit risk than specialized government institutions (SGI). This study scrutinized how MENA economies can remain stable through banking competition. This study builds a new brand of literature review. As a result, this research gives MENA policymakers better ideas for making policies that help the banking environment.

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“…Moreover, the relationship between CEE and bank performance extends to risk management. Studies suggest that banks with higher CEE perform better financially and exhibit more prudent risk management behaviours, which is vital for long-term sustainability (Zheng et al, 2022). This efficient capital management indicates a bank's overall managerial competence and strategic execution, essential for navigating the complex dynamics of the global financial market.…”

Section: Intellectual Capital Components and Its Impact On Sustainabl...mentioning

confidence: 99%

The Impact of Intellectual Capital on Sustainable Performance: Banking Sector in Saudi Arabia

Sayed,

Nefzi

2024

Preprint

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This study investigates the impact of intellectual capital on the sustainable performance of banks in Saudi Arabia, focusing on the period from 2012 to 2022. Utilizing data from ten major Saudi banks, the research examines how different components of intellectual capital—Human Capital Efficiency (HCE), Structural Capital Efficiency (SCE), and Capital Employed Efficiency (CEE)—influence key financial performance indicators such as Return on Equity (ROE) and Net Profit Margin (NPM). The study is grounded in the resource-based view of the firm, which suggests that a firm’s internal resources can provide a sustainable competitive advantage. The analysis employs panel data techniques, including fixed and random effects models, to assess the relationships between intellectual capital components and bank performance while controlling for variables like bank size, financial leverage, GDP growth, inflation, and the impact of the COVID-19 pandemic. The findings reveal that intellectual capital significantly enhances bank performance in Saudi Arabia, with human capital efficiency showing the most decisive influence on ROE and NPM. Structural capital and capital employed efficiency also contribute positively but vary in their impact on different performance measures. This research contributes to the theoretical and practical understanding of the role of intellectual capital in promoting sustainable banking practices. It underscores the importance of strategic management of intellectual capital in enhancing financial performance and achieving sustainability goals, particularly in the context of Saudi Arabia's Vision 2030. The study's insights are relevant for bank managers and policymakers who leverage intellectual capital for economic diversification and sustainable development.

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Does intellectual capital efficiency matter for banks’ performance and risk-taking behavior?

Cited by 15 publications

References 95 publications

Investigating the Impact of Intellectual Capital on the Sustainable Financial Performance of Private Sector Banks in India

Investigating the Impact of Intellectual Capital on the Sustainable Financial Performance of Private Sector Banks in India

The Nexus of Banks’ Competition, Ownership Structure, and Economic Growth on Credit Risk and Financial Stability

The Impact of Intellectual Capital on Sustainable Performance: Banking Sector in Saudi Arabia

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