The efficiency of GCC banks: the role of intellectual capital

Abstract

Purpose This study aims to examine the impact of intellectual capital (IC) efficiency on bank’s operational, financial and market performance. Design/methodology/approach The study examined 59 banks for 5 years to ends up with 295 observations. The independent variable is the modified value added IC component; the dependent variables are performance indicators (return on assets [ROA], return on equity [ROE] and Tobin’s Q [TQ]). Findings The findings deduced from the empirical results demonstrate that there is a positive relationship between intellectual capital efficiency and financial performance (ROE) and market performance (TQ). Originality/value The results of this study may give a wake-up call for banks to examine the reasons of imperfect relationship between the IC and asset efficiency (ROA).

Intellectual capital and bank performance in Vietnam

“…In addition, Buallay et al (2020) confirm that human capital efficiency and capital employed efficiency, two key components of intellectual capital, positively affect bank performance in member countries of the Gulf Cooperation Council. They reveal that intellectual capital efficiency has a positive effect on the return on equity and Tobin's Q.…”

“…Various studies have been conducted to examine the impacts and contributions of intellectual capital on the bank performance (e.g. 59 listed banks in Gulf countries in Buallay et al, 2020;26 Pakistani banks in Haris et al, 2019; 16 listed banks in Thailand in Tran and Vo, 2018; 44 banks in Turkey in Ozkan et al, 2017;20 banks in India in Singh et al, 2016). These papers cover different periods.…”

“…These papers cover different periods. In addition, different econometric techniques are also used in these papers, such as fixed-effects and random-effects techniques (Tran and Vo, 2018;Ozkan et al, 2017) and ordinary least squares (OLS) techniques (Buallay et al, 2020). In all these papers, the VAIC model is used to measure the level of intellectual capital.…”

“…Our 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.…”

ESG impact on performance of US S&P 500-listed firms

“…This problem may influence firms' future performance, even the planet as a whole. Public awareness of this global issue has required firms to establish environmental regulations and disclose information regarding their commitments towards this vital issue (Nor et al, 2016;Buallay et al, 2020aBuallay et al, , 2020b.…”