The Examination of Relationship between Intellectual Capital and Financial Performance According to the Modulating Role of Competitive Advantage

Pourmozafari, Azam; Heyrani, Forough; Moeinadin, Mahmoud

doi:10.6007/ijarafms/v4-i1/584

Cited by 6 publications

(4 citation statements)

References 11 publications

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“…Nonetheless, the most widely-applied method in gauging IC is Value-Added Intellectual Coefficients (VAIC) that has been developed by Pulic (12). The method has garnered increasing attention from researchers in identifying the relationship between IC efficiency and organisational performance (4,13,14). It also has been used in numerous studies in banking sector especially in analysing the linkage between IC efficiency and banks' performance across many countries like Turkey (11), India (15,16), Thailand (17), Ghana (13), Malaysia (18) and so forth.…”

Section: Introductionmentioning

confidence: 99%

Empirical Linkage of Intellectual Capital and Performance of Islamic Banks

Saruchi¹,

Zamil²,

Basiruddin³

et al. 2019

IJEAT

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With the eminence of the era of knowledge-based economies, the concept of intellectual capital (IC) is of vital importance for organisations to survive in these vigorous environments. As one of the knowledge intensive sectors, there is no exception to banking institutions in enhancing their intellectual capital efficiency to the forefront especially for Islamic banks (IBs) that have to compete with the firmlyestablished conventional banks. Accordingly, this study intends to measure the relationship between intellectual capital efficiency and banks’ performance. In total, 59 Islamic banks are selected and their audited annual reports are compiled from the banks’ websites respectively from year 2006-2017. Value-added intellectual coefficient (VAIC) are applied in measuring IC efficiency. The findings provide empirical evidences of positive relationship between IC efficiency and banks performance, nonetheless, when decomposes into human capital efficiency (HCE), structural capital efficiency (SCE) and capital employed efficiency (CEE), only human capital efficiency shows significant positive relationship with performance of the banks while the other two components show significant negative linkage with bank performance. Furthermore, due to criticisms towards VAIC method, this study using modified value-added intellectual capital coefficient (MVAIC) and found that MVAIC has significant positive relationship with bank performance while relational capital as additional variable in MVAIC regression model has no significant effect with bank performance. This study provides better insights on the importance of utilisation of IC by banking institutions particularly for Islamic banks.

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Section: Introductionmentioning

confidence: 99%

Empirical Linkage of Intellectual Capital and Performance of Islamic Banks

Saruchi¹,

Zamil²,

Basiruddin³

et al. 2019

IJEAT

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“…In fact, they started to become conscious of an unseen driver that leads to better performance as well, which is intangible asset that famously known as intellectual capital (IC). Thus, it is important to be cognisant of the importance of knowledge creation or in part, the significance of intellectual capital (IC) on financing performance (Nimtrakoon, 2015) which can directly sustain the competitive advantage (Pourmozafari et al, 2014) of particular organisation. Additionally, as highlighted by Barney, Wright, and Ketchen Jr (2001), based on resource-based view theory, every organization possess the resources and capabilities which can be viewed as bundles of tangible and intangible assets where they will be able to create competitive advantage of organization since these resources are valuable, rare, imperfectly imitable, and not substitutable.…”

Section: Introductionmentioning

confidence: 99%

Examining the Impact of Corporate Governance on Intellectual Capital: Empirical Evidence of Islamic Banks

Saruchi¹,

Zamil²,

Basiruddin³

et al. 2019

IJARAFMS

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Using the sample of 59 Islamic banks during the period of 2006-2017, the purpose of this paper is to examine the impact of corporate governance mechanisms through the characteristics of board of directors that may influence the intellectual capital (IC) efficiency of Islamic banks. The characteristics of board of directors are represented through the size of the board (board size), the proportion of female members on the board (board female), the number of board meetings (board meeting), the proportion of board members who have financing and accounting expertise (board expertise) and the diversity in terms of board members' nationalities (board nationality diversity). Meanwhile, IC efficiency has been measured using value-added intellectual coefficient (VAIC). This study provides empirical evidence showing that board expertise has positively associated with IC efficiency. This study also examines the linkage between corporate governance mechanisms and IC components namely HCE, SCE and CEE and found that board expertise exerts positive significant impact to HCE and SCE while no significant impact to CEE. Additionally, board female has significant positive relationship with SCE. The study is extremely pivotal in order to know the determinants that can contribute to the enhancement of IC efficiency in respect of corporate governance of Islamic banks.

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“…Also, banks with high intellectual capital records high financial performance and therefore recommends that all banks should embrace this new intellectually based technology in order to enhance their financial performances, returns to their different stakeholders as well as in their service delivery to their customers. Pourmozafari, Heyrani, and Moeinadin (2014), carried out a study on the examination of the relationship between intellectual capital and financial performance according to the modulating role of competitive advantage. The research design adopted was ex-post facto in nature and the study examined 45 companies listed on Tehran Stock Exchange through 225 answered questionnaire from 300 sent questionnaires by managers, conducted in the period ranging from 2012-2013.…”

Section: The Nexus On Effect Of Intellectual Capital Accounting On Earnings Performance Of Listed Deposit Money Banks In Nigeriamentioning

confidence: 99%

The Nexus on Effect of Intellectual Capital Accounting on Earnings Performance of Listed Deposit Money Banks in Nigeria

Nmesirionye¹

2021

ijsshr

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This work examined the effect of Intellectual capital accounting on earnings generation of listed deposit money banks in Nigeria. The study adopted the ex-post facto research design and panel regression statistical technique, involving the use of time series and cross-sectional data. Data covered the period of eight-years (2011-2018); considering the total population of fourteen (14) listed commercial banks in Nigeria, random sampling was employed in selecting firms for this study involving eleven (11) listed deposit banks. Data were sourced secondarily from the firms' published annual financial statements. Value Added Intellectual Coefficient (VAIC) theory as developed by Pulic (1998) was adopted for this study. It was discovered from the findings that Intellectual Capital Accounting all have a positive and significant effect on gross earnings. Therefore, Intellectual Capital Accounting have a positive and significant effect on earnings generation of listed deposit money banks in Nigeria. In view of our findings managing directors of listed deposit money banks should carry out a proper implementation and regular monitoring of the systems, procedures and program (structural capital), all with an effective and efficient support from higher and middle line management, as this will ensure expansion in all frontiers of the business.

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The Examination of Relationship between Intellectual Capital and Financial Performance According to the Modulating Role of Competitive Advantage

Abstract: Intellectual capital is a new matter that theoretically is suggested in the few

Cited by 6 publications

References 11 publications

Empirical Linkage of Intellectual Capital and Performance of Islamic Banks

Empirical Linkage of Intellectual Capital and Performance of Islamic Banks

Examining the Impact of Corporate Governance on Intellectual Capital: Empirical Evidence of Islamic Banks

The Nexus on Effect of Intellectual Capital Accounting on Earnings Performance of Listed Deposit Money Banks in Nigeria

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