Intellectual capital and bank performance in Vietnam

Abstract

PurposeFor the past two decades, intellectual capital has played an increasingly important role in firm performance around the world. However, the importance of intellectual capital in Vietnam, and especially in the banking sector, has largely been ignored in the literature. This study is the first to examine the effect of intellectual capital on bank performance in Vietnam. In this paper, intellectual capital is decomposed into three components: (1) capital employed efficiency, (2) human capital efficiency and (3) structural capital efficiency.Design/methodology/approachThe paper uses an unbalanced panel dataset on 14 listed banks in Vietnam for the period 2009–2018 for which required data are available, with the generalized method of moments.FindingsThe findings indicate that intellectual capital contributes significantly and positively to bank performance in Vietnam. In addition, bank performance is driven primarily by capital employed efficiency. Although human capital efficiency appears to contribute positively to bank performance, the effect on bank performance appears to be marginal.Originality/valueThe literature review indicates that the effect of intellectual capital on bank performance is mixed. This effect can be positive or negative or even show a U-shaped relationship. The effects of intellectual capital on firm performance are not consistent, depending on factors such as the quantitative technique and sample used. As such, this paper extends analysis of Vietnam to cover the 10-year period from 2009 to 2018. The literature review reveals that the contribution of intellectual capital to bank performance has largely been ignored in the context of Vietnam. Studies have been conducted on the Gulf countries, such as Buallay et al. (2020). However, because the context in Vietnam differs from that of the Gulf countries, their experience might not be relevant to Vietnam. Vietnam is an emerging market in Southeast Asia, whereas Gulf countries have high income levels. So, it is necessary to examine direct evidence on Vietnam.

The Impact of Intellectual Capital on Bank Profitability during COVID‐19: A Comparison with China and Pakistan

“…(2) Independent Variables. is study uses Pulic [17]'s VAIC model to measure IC efficiency of listed banks, consistent with Meles et al [34], Tran and Vo [36], Xu et al [38], Mondal and Ghosh [41], Vo and Tran [43], Ousama et al [62], and Le and Nguyen [63]. e VAIC model identifies banks with profitability in maximizing their economic performance in the process of value creation.…”

“…Joshi et al [42] found that Australian bank performance is highly influenced by HC, while physical and structural capitals play a minor role in value creation. e findings of Vo and Tran [43] showed that the performance of listed banks in Vietnam is driven primarily by physical capital.…”

Cross-Region Comparison Intellectual Capital and Its Impact on Islamic Banks Performance

“…Nonaka et al (2017) argue that companies need to create new knowledge to ensure their future existence, so they must have good strategic and resource management. Several previous studies analyse the IC components independently of their dependent variables, such as research (Akkas and Asutay 2022;Chatterjee et al 2022;Dalwai and Mohammadi 2020;Dalwai and Salehi 2021;Kweh et al 2021;Vo and Tran 2021). This opinion considers each component's specific impact on performance rather than the impact of IC more broadly.…”

“…Nawaz and Haniffa (2017) find that SC is not significant to performance. Tiwari and Vidyarthi (2018) find evidence that CE is not significant for performance, while Vo and Tran (2021) find that only CE is proven to affect performance.…”

“…Some of the results of previous studies partially relate IC to company performance, but it is not clear if these can be extended beyond the results of those particular studies (Kweh et al 2019). There are varying results from empirical studies that consider IC components as independent, stand-alone variables (e.g., Nawaz and Haniffa 2017;Tiwari 2021;Vo and Tran 2021). Nawaz and Haniffa (2017) find that SC is not significant to performance.…”