Intellectual capital reporting practices in an Islamic bank: A case study

Abstract

Given the nature and importance of Islamic banks in recent times, we can expect them to have significant intellectual capital anchored in their Sharia-based knowledge and expertise. However, we know very little or nothing about how and why intellectual capital-related information is provided in their corporate reports. We fill this gap in our existing knowledge of the field with a view to enhance relevant literature. As far as we know, this article is one of the earliest exploratory attempts to examine intellectual capital reporting practices of an Islamic bank. We have undertaken a longitudinal (2001-2015) case study related to the intellectual capital reporting practices of an Islamic bank. Key results include significant rise of intellectual capital reporting over time, dominance of internal capital-related items in intellectual capital reporting profile and the dynamics of changes in intellectual capital reporting practices over time. Through an institutional theory lens, we explain that this is due to the changes in the external institutional environment and various intra-organisational factors such as strong ethical culture, unique knowledge base (Sharia), and corporate governance regime. K E Y W O R D S Bangladesh, case study, external capital, human capital, intellectual capital reporting, internal capital, Islamic banking

Intellectual capital disclosure practices of financial institutions in an emerging economy

“…The finding of this study is consistent with a prior study on ICD of banking industry in Bangladesh by Khan and Ali (2010) and Belal et al (2018). However, a comparison of the findings of the current study with some other prior studies highlights some inconsistency as well.…”

“…Findings of this study enrich the literature of ICD by providing deep insights about the tendency and strategic priorities of financial institutions for adopting their ICD practices. In addition, unlike prior studies (Khan and Ali (2010), Nurunnabi and Hossain, 2011;Abhayawansa and Azim, 2014;Belal et al, 2018;Dey and Faruq, 2019;Rahman et al, 2019) in the context of Bangladesh, the current study extends the ICD literature with the empirical findings about the variability of ICD practices between the sub-sectors of financial industry.…”

“…Indeed, the level of ICD practices depends on strategic preference of companies (Slack and Munz, 2016) regardless of its nature of industry. In addition, although studies by Khan and Ali (2010) and Belal et al (2018) investigated the ICD practices of banks in Bangladesh, none of the prior studies considered non-banking financial institutions (NBFI) for investigating ICD practices. Therefore, the current study attempts to investigate the ICD practices of financial institutions, including both banks and NBFIs of Bangladesh.…”

Should Listed Banks Be Concerned with Intellectual Capital in Emerging Asian Markets? A Comparison between China and Pakistan

“…Banks' performance not only directly reflects the overall situation of the banking industry, but also relates to the sustainable development of the national economy [7]. The banking sector, due to its knowledge-intensive nature, is appropriate to conduct IC research [7][8][9][10][11][12][13][14][15][16][17][18][19][20][21]. Firstly, banks largely depend on their customers to create competitive advantages.…”

Can cross-listing improve investment efficiency? Empirical evidence from China

“…This viewpoint has been supported by scholars who consistently believe that cross-listing provides minority shareholders legal assistance means with effective execution and low cost (Del Bosco & Misani, 2016;Doidge et al, 2009;Lu et al, 2020). Moreover, cross-listing exposes enterprises to the supervision of 'reputation media' (Coffee, 2002), increases the information content of share price (Zhong & Lu, 2018), and improves accounting information quality (Belal et al, 2019;Kamarudin et al, 2020) and information environment (Aggarwal et al, 2011;Ball et al, 2018;Guo et al, 2018). Then, cross-listing effectively relieves a series of agency problems ascribed to information asymmetry (Herrmann et al, 2015;Zhu et al, 2017).…”