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Article
Publication date: 25 July 2008

Magdi El‐Bannany

The purpose of this paper is to investigate the determinants of intellectual capital performance in the UK banks over the period 1999‐2005.

Abstract

Purpose

The purpose of this paper is to investigate the determinants of intellectual capital performance in the UK banks over the period 1999‐2005.

Design/methodology/approach

Multiple regression analysis is used to test the relationship between the intellectual capital performance as a dependent variable and certain independent variables.

Findings

Results indicate that the standard variables, bank profitability and bank risk, are important. The results also show that investment in information technology (IT) systems, bank efficiency, barriers to entry and efficiency of investment in intellectual capital variables, which have not been considered in previous studies, have a significant impact on intellectual capital performance.

Research limitations/implications

More evidence is needed on the determinants of intellectual capital performance before any generalisation of the results can be made. In addition, the empirical tests were conducted only on the Major British Banks Group over the period 1999‐2005 and hence the results of the study cannot be assumed to extend beyond this group of banks or to different study periods.

Practical implications

The study might help the banking regulators in addressing the factors affecting intellectual capital performance to take actions towards developing their performance and in turn maximise their value creation.

Originality/value

This paper adds to the literature on the determinants of intellectual capital performance in banks. In particular, it tests the theories that investment in IT systems, bank efficiency, barriers to entry and efficiency of investment in intellectual capital have impact on intellectual capital performance.

Details

Journal of Intellectual Capital, vol. 9 no. 3
Type: Research Article
ISSN: 1469-1930

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Article
Publication date: 1 September 2001

S. Mitchell Williams

Breaks with the prior literature on intellectual capital disclosure practices in two major ways. First, provides a longitudinal examination of intellectual capital

Abstract

Breaks with the prior literature on intellectual capital disclosure practices in two major ways. First, provides a longitudinal examination of intellectual capital disclosure practices in the annual reports of 31 FTSE 100 listed companies from 1996‐2000. Second, investigates the relationship between intellectual capital performance and the extent of intellectual capital disclosure. Between 1996 and 2000 the quantity of intellectual capital disclosure increased. Empirical findings did not indicate a systematic relationship between intellectual capital performance and the quantity of disclosure during the survey period. Results, however, suggest that if intellectual capital performance is too high the amount of disclosure is reduced. This negative association may support the suggestion that firms reduce intellectual capital disclosures when performance reaches a threshold level for fear of competitive advantage being lost. Leverage, industry exposure and listing status was also found to have an influence on the quantity of disclosure.

Details

Journal of Intellectual Capital, vol. 2 no. 3
Type: Research Article
ISSN: 1469-1930

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Book part
Publication date: 9 August 2014

Abstract

Details

Intellectual Capital and Public Sector Performance
Type: Book
ISBN: 978-1-78350-169-4

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Article
Publication date: 24 March 2021

Duc Hong Vo and Ngoc Phu Tran

For the past two decades, intellectual capital has played an increasingly important role in firm performance around the world. However, the importance of intellectual

Abstract

Purpose

For 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/approach

The 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.

Findings

The 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/value

The 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.

Details

Managerial Finance, vol. 47 no. 8
Type: Research Article
ISSN: 0307-4358

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Book part
Publication date: 18 November 2013

Abstract

Details

Intellectual Capital and Public Sector Performance
Type: Book
ISBN: 978-1-78350-169-4

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Article
Publication date: 23 October 2020

Susana Campos, José G. Dias, Mário Sérgio Teixeira and Ricardo Jorge Correia

This study focuses on intellectual capital (IC) as a driver of better business performance. Recent studies suggest that a set of variables may mediate this relationship…

Abstract

Purpose

This study focuses on intellectual capital (IC) as a driver of better business performance. Recent studies suggest that a set of variables may mediate this relationship. This research discusses the mediating role of dynamic capabilities, network competence, technological capabilities, absorptive capabilities and innovation performance between intellectual capital and business performance.

Design/methodology/approach

The conceptual model is tested using a sample of 533 Portuguese firms by means of a structural equation model.

Findings

It confirms that intellectual capital impacts business performance. Moreover, this only happens indirectly through the mediating chain defined by the variables dynamic capabilities, network competence, technological capabilities, absorptive capabilities and innovation performance.

Originality/value

This study analyzes new mediator variables between the dimensions of the intellectual capital and Portuguese business performance.

Details

Journal of Intellectual Capital, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1469-1930

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Article
Publication date: 13 November 2019

Leena Afroz Mostofa Chowdhury, Tarek Rana and Mohammad Istiaq Azim

The purpose of this paper is to, the first of its kind, investigate the relationship between the intellectual capital efficiency and organisational performance of the…

Abstract

Purpose

The purpose of this paper is to, the first of its kind, investigate the relationship between the intellectual capital efficiency and organisational performance of the pharmaceutical sector in Bangladesh, an emerging economy that enjoys Trade-Related Aspects of Intellectual Property Rights (TRIPS) relaxation.

Design/methodology/approach

The study used hand-picked data from annual reports for five years. The relationship between efficient use of intellectual capital and corporate performance was examined through the practical use of human capital, structural capital and capital employed. Multiple regressions were used to assess their impact on financial performance – specifically, return on assets, return on equity, asset turnover and market-to-book value.

Findings

Value-added intellectual coefficient components (i.e. human capital, structural capital and capital employed) significantly explained asset turnover and return on assets but failed to predict the return on equity outcome. Additionally, asset turnover was negatively influenced by structural capital and positively influenced by capital employed. The return on assets was mostly affected by variation in human capital. Intellectual capital did not predict market-to-book value or investment decisions.

Practical implications

This paper provides useful resources for evaluating the financial performance and value creation of companies in emerging economies that enjoy TRIPS exemptions; this research could also be extended using cross-industry comparisons. The findings have theoretical and practical implications, particularly for the pharmaceutical industry in emerging economy contexts, and for managers globally.

Originality/value

This study is among only a few that have reported on the relationship between intellectual capital efficiency and value creation in emerging economy contexts.

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Article
Publication date: 21 June 2020

Noorlailie Soewarno and Bambang Tjahjadi

This study aims to investigate the intellectual capital–financial performance relationship using two models, namely the conventional Value-Added Intellectual Coefficient…

Abstract

Purpose

This study aims to investigate the intellectual capital–financial performance relationship using two models, namely the conventional Value-Added Intellectual Coefficient (VAIC) model and the adjusted Value-Added Intellectual Coefficient (A-VAIC) model.

Design/methodology/approach

This study is designed as a quantitative research focusing on the relationship between intellectual capital and financial performance of the banking industry in Indonesia. As many as 114 data are derived from the publicly listed banks on the Indonesia Stock Exchange for the period of 2012–2017. The multiple regression analysis is employed to test the hypotheses studied.

Findings

In general, the result confirms that intellectual capital affects financial performance. Although not all hypotheses of the study are supported by either the VAIC model or the A-VAIC model, the results provide a deeper and new insight on how each component of intellectual capital efficiency (human capital, structural capital, capital employed, innovation capital) relates to financial performance (return on asset, return on equity, asset turnover, price to book ratio). The results also justify that further improvements in measuring intellectual capital are still needed in the future.

Research limitations/implications

This study limits its generalization since the sample is only in the Indonesian banking industry. Notwithstanding the limitation, the results imply that the Indonesian banking managers need to be aware of intellectual capital management because of its strategic role in enhancing financial performance.

Practical implications

This study contributes to the intellectual capital literature by providing empirical evidence on the use of both models, namely the conventional VAIC and the A-VAIC in the Indonesian banking industry research setting which is never been studied before.

Social implications

This study has the social implication to the enhancement of the quality life of the society. The higher the quality of intellectual capital in the banking firms, the better the banks serve the needs of the community.

Originality/value

This study contributes to the IC literature by providing empirical research on the use of the VAIC model and the A-VAIC model in the Indonesian banking industry.

Details

Journal of Intellectual Capital, vol. 21 no. 6
Type: Research Article
ISSN: 1469-1930

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Article
Publication date: 9 March 2020

Muhammad Khalique, Khushbakht Hina, T. Ramayah and Jamal Abdul Nassir bin Shaari

The main aim of this study was to examine the effect of the components of intellectual capital on the organizational performance of SMEs operating in tourism sector at…

Abstract

Purpose

The main aim of this study was to examine the effect of the components of intellectual capital on the organizational performance of SMEs operating in tourism sector at Azad Jammu and Kashmir Pakistan.

Design/methodology/approach

In this empirical study, survey approach was used and primary data were collected through structured questionnaire. A total of 300 structured questionnaire survey forms were distributed through purposive sampling technique. Two hundred and twenty usable questionnaire survey forms were returned. Six research hypotheses were constructed to achieve the objective of this study. Smart Partial Least Square (PLS) 3 was used to test the proposed research hypotheses.

Findings

The findings showed that two out of six hypotheses were supported. Precisely, customer capital has appeared as one of the most important components of intellectual capital in model. The results showed that the overall intellectual capital has effect on the organizational performance of SMEs. Results shed more light on the effects that the components of intellectual capital have on organizational performance of SMEs, particularly in the context of Pakistan.

Research limitations/implications

This research is limited to SMEs in tourism sector in Pakistan and the data were gathered through questionnaire which used mostly subjective measures. Subsequently, findings may not be applicable to other industries. The research contributes to the development of intellectual capital literature focused on the organizational performance in the perspective of SMEs in emerging economies. Future research needs to reach beyond the boundaries and understand the effect of intellectual capital on the performance of organizations.

Originality/value

This study extended the knowledge about the prominence of intellectual capital and its effect on the organizational performance of SMEs. Moreover, this study identified the level of existence and measurement of the six components of intellectual capital in SMEs which enables practitioners to develop adequate strategies to better manage it. To author's best knowledge, this study can be the first empirical study which investigates the impact of intellectual capital on the organizational performance of SMEs operating in tourism sector in Pakistan.

Details

Journal of Intellectual Capital, vol. 21 no. 3
Type: Research Article
ISSN: 1469-1930

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Article
Publication date: 11 July 2016

Sukhdev Singh, Jasvinder Sidhu, Mahesh Joshi and Monika Kansal

The purpose of this paper is to measure the intellectual capital performance of Indian banks and established a relationship between intellectual capital and return on…

Abstract

Purpose

The purpose of this paper is to measure the intellectual capital performance of Indian banks and established a relationship between intellectual capital and return on assets (ROA). The paper also compared the intellectual capital performance of public sector and private sector banks.

Design/methodology/approach

This study is based on secondary data from the top 20 Indian banks. Ten banks were selected from each of the public and private sectors on the basis of paid-up equity capital. The analysis was made using the value added intellectual coefficient, the coefficient of variation, exponential growth rates, trend analysis, Yule’s coefficient, the coefficient of correlation, the F-test and the t-test.

Findings

The study revealed that private sectors have performed relatively better regarding the creation of total information coefficient (IC). However, the ROA was still below the international benchmark of > 1 percent. The major cause of the lower IC and the reduced ROA is disproportionate to the increase in capital employed and escalating non-performing assets in the Indian banking sector.

Practical implications

The study focussed on managers and identified the causes of lower performance. It proposed numerous strategies to improve the aggregate score of IC, which is closely related to bank profitability.

Originality/value

This is the first study to make a comparative analysis of intellectual capital performance in public and private sector banks in India and in addition to the traditional style of measuring sectoral performance. Further, the study employed new statistical tools, such as Yule’s coefficient of association, to establish the association between performance variables.

Details

Managerial Finance, vol. 42 no. 7
Type: Research Article
ISSN: 0307-4358

Keywords

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