Intellectual capital and bank branches' efficiency: an integrated study
Journal of Intellectual Capital
ISSN: 1469-1930
Article publication date: 8 March 2021
Issue publication date: 26 May 2022
Abstract
Purpose
This study aims to investigate the association between intellectual capital (IC) and bank efficiency of Taiwanese bank branches.
Design/methodology/approach
This study manually collects sample data from 107 non-public financial reports of the bank branches of Taiwan Business Bank Company Limited. As this study concerns bank branches, this study uses questionnaires related to IC to measure the implementation of IC at branch level. This study employs data envelopment analysis (DEA) models (BCC, EBM and BootBCC) to identify bank branches' efficiency. This study uses partial least square-based structural equation modeling analysis to assess the impact of IC and bank efficiency.
Findings
Result reveals that relational capital (RC) significantly and negatively impacts bank efficiency. Findings also imply that human capital (HC) and structural capital (SC) do not contribute to bank efficiency in Taiwan.
Practical implications
Spending effort in building relationships with customers diverts banks' resources. More inputs that are used may not be converted to outputs immediately. Bank branches should focus on enhancing their service quality to attract customers to use the facilities provided by branches.
Originality/value
To the best of the authors' knowledge, this empirical study is the first to examine the association between IC and bank branches' efficiency in Taiwan by integrating primary and secondary data. For IC components, this study conducts a survey by designing the questionnaires related to IC to assess the implementation of IC at bank branches in Taiwan. In terms of efficiency, this study uses bank financial data and DEA models to identify bank branches' efficiency.
Keywords
Acknowledgements
This research is funded by the Foundation for Science and Technology Development of Ton Duc Thang University (FOSTECT), website: http://fostect.tdtu.edu.vn, under Grant FOSTECT.2019.B.14.
Citation
Ting, I.W.K., Chen, F.-C., Kweh, Q.L., Sui, H.J. and Le, H.T.M. (2022), "Intellectual capital and bank branches' efficiency: an integrated study", Journal of Intellectual Capital, Vol. 23 No. 4, pp. 840-863. https://doi.org/10.1108/JIC-07-2020-0245
Publisher
:Emerald Publishing Limited
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