Empirical Linkage of Intellectual Capital and Performance of Islamic Banks

Saruchi, Sarah Athirah; Zamil, Nor Aiza Mohd; Basiruddin, Rohaida; Rasid, Siti Zaleha Abdul; Ahmad, Nor Faezah Ghazi

doi:10.35940/ijeat.e1095.0585c19

Cited by 3 publications

(8 citation statements)

References 14 publications

(28 reference statements)

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“…The studies have shown a positive relationship between human capital and Islamic bank performance in various countries, including Malaysia (Ousama and Fatima, 2015), Indonesia (Muafi et al, 2017;Setyawati et al, 2019), Pakistan (Ali et al, 2022;Haris et al, 2018) and Bangladesh (Basak et al, 2022;Belal et al, 2019), and the same positive relationship has been found by other studies as well in the sample of multiple countries (Asutay and Ubaidillah, 2023;Nawaz et al, 2021;Nawaz and Haniffa, 2017;Prasojo et al, 2022aPrasojo et al, , 2022bRehman et al, 2022;Saruchi et al, 2019).…”

Section: Introductionsupporting

confidence: 61%

“…This is particularly crucial in understanding the relationship between workforce efficiency and financial performance. The studies employing HCE, such as Aslam and Haron (2021), Nawaz (2019b) and Saruchi et al (2019), among others Asutay, 2022b, 2022a;Basak et al, 2022;Buallay, 2019;Buallay et al, 2019;Haris et al, 2018;Musibah and Alfattani, 2014;Nawaz et al, 2021;Nawaz and Haniffa, 2017;Ousama et al, 2020;Ousama and Fatima, 2015;Prasojo et al, 2022bPrasojo et al, , 2022aRehman et al, 2022;Wahyuni et al, 2023;Yahya and Ibrahim, 2021) Human capital and financial performance aim to gauge the efficiency and productivity of human capital within Islamic banks. The popularity of HCE in the literature underscores its importance as a benchmark for assessing human capital's contribution to success of Islamic banking.…”

Section: Human Capital and Islamic Bankingmentioning

confidence: 99%

“…Return on assets (ROA) is one of the most widely used measures of financial performance, used in several studies such as Nawaz and Haniffa (2017), Ousama and Fatima (Ousama and Fatima, 2015), Akkas and Asutay (2022a) and many others Asutay, 2022b, 2022a;Aslam et al, 2023;Basak et al, 2022;Buallay, 2019;Buallay et al, 2019;Haris et al, 2018;Musibah and Alfattani, 2014;Nawaz, , 2019bNawaz et al, 2021;Ousama et al, 2020;Prasojo et al, 2022aPrasojo et al, , 2022bSaruchi et al, 2019;Setyawati et al, 2019;Wahyuni et al, 2023;Yahya and Ibrahim, 2021). ROA measures a bank's ability to generate profits from its assets, including human capital.…”

Section: Human Capital and Islamic Bankingmentioning

confidence: 99%

“…Return of equity (ROE) is another widely used financial performance measure, appearing in multiple studies, including Nawaz and Haniffa (2017), Ousama and Fatima (Ousama and Fatima, 2015) and more Asutay, 2022b, 2022a;Basak et al, 2022;Buallay, 2019;Buallay et al, 2019;Musibah and Alfattani, 2014;Nawaz, , 2019bOusama et al, 2020;Prasojo et al, 2022a;Saruchi et al, 2019;Setyawati et al, 2019;Wahyuni et al, 2023;Yahya and Ibrahim, 2021). ROE evaluates the profitability of an Islamic bank's equity capital and is calculated as the ratio of net income to shareholders' equity.…”

Section: Human Capital and Islamic Bankingmentioning

confidence: 99%

“…Tobin's Q is a financial performance measure found as well in several studies, such as , Nawaz et al (2021) and others (Akkas and Asutay, 2022a;Ousama et al, 2020;Saruchi et al, 2019). Tobin's Q assesses the market's valuation of an Islamic bank relative to the replacement cost of its assets.…”

Section: Human Capital and Islamic Bankingmentioning

confidence: 99%

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Human capital and financial performance of Islamic banks: a meta-analysis

Zafar

2024

ARJ

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Purpose This paper aims to meta-analyze the results of the prior studies related to the relationship of human capital and financial performance in Islamic banking. Design/methodology/approach To examine the relationship between human capital and financial of Islamic banks, 23 empirical studies having sample of 15,607 are considered for the meta-analysis. Moreover, different measures related to financial performance including return on assets (ROA), return of equity (ROE) and Tobin’s Q have been taken as moderating for further subgroup analysis. Findings The results of meta-analysis reveal a positive correlation between human capital and financial performance with an effect size of 0.268. The subgroup analyses showed significant positive associations of human capital with ROA and ROE, insignificant with Tobin’s Q. Originality/value This study suggests Islamic banking should prioritize human capital development, maintain consistency and adopt a long-term perspective. Future research should consider context-specific factors and harmonize human capital and financial performance measurements for consensus.

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Section: Introductionsupporting

confidence: 61%

Section: Human Capital and Islamic Bankingmentioning

confidence: 99%

Section: Human Capital and Islamic Bankingmentioning

confidence: 99%

Section: Human Capital and Islamic Bankingmentioning

confidence: 99%

Section: Human Capital and Islamic Bankingmentioning

confidence: 99%

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Human capital and financial performance of Islamic banks: a meta-analysis

Zafar

2024

ARJ

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Human capital and Islamic banking: a systematic literature review

Zafar,

Jafar

2024

JIABR

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Purpose There are many areas of research that are untapped in Islamic banking, and human capital is one of them. This paper aims to systematical review the relevant literature on human capital and Islamic banking. Design/methodology/approach The review process involved a structured search using well-established academic databases, Scopus and Web of Science, resulting in the selection of relevant articles. The paper has been divided into three major themes, besides other discussions on the literature, including methods of measuring human capital, determinants of human capital and human capital and performance of Islamic banks. Findings A few pioneering studies have explicitly examined human capital in the Islamic banking domain, while others have encompassed it under the broader umbrella of intellectual capital. The most common method of measuring human capital is accounting based, while few have adopted disclosure and survey methods as well. There are few studies that explored the determinants of human capital having focus on corporate governance, while many of the studies have explored the nexus of human capital and financial performance. Practical implications This review strongly highlights the need for more focused research on human capital within the Islamic banking sector. As Islamic banking necessitates unique human capital characteristics, it is essential to delve deeper into this aspect. Furthermore, there is a call to expand the human capital index by incorporating comprehensive aspects relevant to Islamic banking. An important area that requires further exploration is the role of Shariah governance in shaping human capital development within Islamic finance, understanding the reasons behind the observed negative correlation. Originality/value Despite its significance, the relationship between human capital and Islamic banking has received limited attention. This review paper not only addresses this gap but also lays the groundwork for future studies in this important and emerging field.

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The role of intellectual capital on zakat performance: insight from Indonesia

Zakiy,

Falikhatun

2024

JIC

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PurposeThis research aims to examine the impact of intellectual capital on zakat performance in Indonesia.Design/methodology/approachThe sample examined in this study consists of 39 zakat management organizations, encompassing 241 observations from 2010 to 2022. Zakat performance is measured using zakat excess efficiency score to align with the characteristics of zakat management organizations. The independent variables in this study are proxied by the components of intellectual capital. Data is analyzed using a panel data estimation technique.FindingsThe empirical findings indicate that human capital efficiency and capital employed efficiency positively and significantly impact zakat performance. In contrast, structural capital efficiency does not impact zakat performance. Meanwhile, value added intellectual coefficient positively and significantly impacts zakat performance.Practical implicationsThe findings in this study highlight the significance of managing intellectual capital in zakat management organizations. Furthermore, this research provides input to mandate the amil to undergo certification, develop information technology in zakat management, and enhance synergy among zakat management organizations in zakat distribution. Additionally, zakat regulators must oversee and standardize zakat management according to what is stipulated in the zakat core principles.Originality/valueThis is one of the first studies using secondary data to examine intellectual capital and zakat performance in Indonesia.

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Empirical Linkage of Intellectual Capital and Performance of Islamic Banks

Cited by 3 publications

References 14 publications

Human capital and financial performance of Islamic banks: a meta-analysis

Human capital and financial performance of Islamic banks: a meta-analysis

Human capital and Islamic banking: a systematic literature review

The role of intellectual capital on zakat performance: insight from Indonesia

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