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Open Access
Article
Publication date: 27 November 2023

Wasim Ul Rehman, Omur Saltik, Suleyman Degirmen, Meti̇n Ocak and Hina Shabbir

The purpose of this study is to examine the dynamic relationship between intellectual capital (IC) and its components on financial performance of banks within the selected eight…

Abstract

Purpose

The purpose of this study is to examine the dynamic relationship between intellectual capital (IC) and its components on financial performance of banks within the selected eight countries of Association of Southeast Asian Nations (ASEAN).

Design/methodology/approach

The study utilizes the balanced panel data of 37 publicly listed banks from eight leading ASEAN economies for the period of 2017–2021. In this sense, the authors applied the Ante Pulic's typology, i.e. value-added intellectual coefficient (VAIC™) to evaluate the efficiency of intangible and tangible assets. While, investigating the dynamic nature of relationship, the authors employed the generalized system method of moments because of its power to account for the problem of endogeneity and heteroscedasticity.

Findings

The results of the study demonstrate that banks in ASEAN countries shed a varied degree of a spotlight on VAIC™ and its components to create value. The findings revealed that structural capital efficiency is significantly associated with earning per share (EPS), return on assets (ROA) and return on equity (ROE), compared to human capital efficiency (HCE) and capital employed efficiency of ASEAN banks. These results endorse the importance of resource- and knowledge-based views of organizations to leverage the financial performance of banks. However, contrary to theoretical expectations, this study found no positive relationship between HCE with ROA and ROE. Whereas, the relationship of VAIC™ is positive and significant with EPS and ROE but it remains statistically very marginal.

Research limitations/implications

There are some inherent limitations in this study that could be opportunities for future research. The current study uses the VAIC™ typology, but future researchers can use the modified value-added intellectual coefficient (MVAIC) or triangulation approach to enhance the validity and reliability of the study. Additionally, future research can investigate the similarities and differences among countries in terms of their cultural backgrounds and regulatory frameworks regarding the disclosure of intangibles. Furthermore, future research can increase the length and sample size of the study to enhance its generalizability.

Practical implications

The robust empirical findings extend the academic debate on IC by unveiling the dynamic nature of relationship between IC and financial performance in context of ASEAN banking sector. The findings provide plausible recommendations for policy makers (managers, regulators and stakeholders) to understand how to increase the IC efficiently, especially human capital as a source to evaluate the firms’ ability in determining value-added and financial performance. Further, findings of this study also suggest that how can policy makers get the benefit by investing more on structural capital as a valuable strategic source to guarantee the optimal performance returns.

Originality/value

Prior studies on IC have been country- and firm-specific, utilizing cross-sectional research designs. However, this research contributes to the limited literature by investigating the dynamic nature of the relationship between IC and financial performance of banks in the context of ASEAN countries using micro-panel data.

Details

Arab Gulf Journal of Scientific Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1985-9899

Keywords

Open Access
Article
Publication date: 12 December 2023

Marcello Cosa, Eugénia Pedro and Boris Urban

Intellectual capital (IC) plays a crucial role in today’s volatile business landscape, yet its measurement remains complex. To better navigate these challenges, the authors…

1078

Abstract

Purpose

Intellectual capital (IC) plays a crucial role in today’s volatile business landscape, yet its measurement remains complex. To better navigate these challenges, the authors propose the Integrated Intellectual Capital Measurement (IICM) model, an innovative, robust and comprehensive framework designed to capture IC amid business uncertainty. This study focuses on IC measurement models, typically reliant on secondary data, thus distinguishing it from conventional IC studies.

Design/methodology/approach

The authors conducted a systematic literature review (SLR) and bibliometric analysis across Web of Science, Scopus and EBSCO Business Source Ultimate in February 2023. This yielded 2,709 IC measurement studies, from which the authors selected 27 quantitative papers published from 1985 to 2023.

Findings

The analysis revealed no single, universally accepted approach for measuring IC, with company attributes such as size, industry and location significantly influencing IC measurement methods. A key finding is human capital’s critical yet underrepresented role in firm competitiveness, which the IICM model aims to elevate.

Originality/value

This is the first SLR focused on IC measurement amid business uncertainty, providing insights for better management and navigating turbulence. The authors envisage future research exploring the interplay between IC components, technology, innovation and network-building strategies for business resilience. Additionally, there is a need to understand better the IC’s impact on specific industries (automotive, transportation and hospitality), Social Development Goals and digital transformation performance.

Details

Journal of Intellectual Capital, vol. 25 no. 7
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 10 January 2023

Jasmina Ognjanovic, Vladimir Dzenopoljac and Stefano Cavagnetto

The study aims to assess the relative impact of intellectual capital (IC) as opposed to tangible assets on profitability and employee performance in hotels in Serbia before and…

Abstract

Purpose

The study aims to assess the relative impact of intellectual capital (IC) as opposed to tangible assets on profitability and employee performance in hotels in Serbia before and during the coronavirus disease 2019 (COVID-19) pandemic.

Design/methodology/approach

The current study was undertaken in 2019, the year before COVID-19, and 2020, the year of COVID-19's major impact. This study utilizes the Value-Added Intellectual Coefficient (VAIC) as a measure of efficient use of IC. Financial data were collected from 163 hotels in Serbia. Structural equation modeling (SEM) was used to test the proposed hypotheses.

Findings

The results revealed that IC was a relevant factor for both profitability and employee performance before and during the COVID-19. However, the study reveals a negative moderating effect of tangible capital efficiency (TCE), meaning that with the increase of TCE, the relationship between IC and performance becomes weaker.

Research limitations/implications

The main limitation of the study is rooted in VAIC's ability to fully incorporate all elements of IC, leaving the relational capital out.

Practical implications

To achieve better performance, hotel management should direct resources more towards IC and less toward tangible assets, which implies doing more with less.

Originality/value

The results indicate the importance of IC in a period of crisis for the industry and economy that are not recognized as knowledge intensive. To the best of the authors' knowledge, no other study has attempted to assess the relative contribution of tangible assets and IC before and during the COVID-19 pandemic.

Details

Journal of Hospitality and Tourism Insights, vol. 6 no. 5
Type: Research Article
ISSN: 2514-9792

Keywords

Article
Publication date: 28 February 2024

Mushahid Hussain Baig, Jin Xu, Faisal Shahzad and Rizwan Ali

This study aims to investigate the association of FinTech innovation (FinTechINN) and firm performance (FP) by considering the role of knowledge assets (KA) as a causal mechanism…

Abstract

Purpose

This study aims to investigate the association of FinTech innovation (FinTechINN) and firm performance (FP) by considering the role of knowledge assets (KA) as a causal mechanism underlying the FinTechINN – FP association.

Design/methodology/approach

In this study, the authors consider panel data of 1,049 Chinese A-listed firm and construct a structural model for corporate FinTech innovation, knowledge assets and firm performance while considering endogeneity issues in analyses over the period of 2014–2022. The modified value added intellectual capital (VAIC) and research and development (R&D) expenses are used as a proxy measure for knowledge assets, considering governance and corporate performance measures.

Findings

According to the findings of this study FinTech innovation (FinTechINN) has a positive significant effect on firm performance. Particularly; the findings disclose that FinTech innovations has a link with knowledge assets, FinTech innovations indirectly affects firm performance, and the association between FinTech innovation and firm performance is partially mediated by knowledge assets (MVAIC and R&D expenses).

Originality/value

Rooted in the dynamic capability and resource-based view, this study pioneers an empirical exploration of the association of FinTech innovation with firm performance. Moreover, it introduces the novel dimension of knowledge assets (on firm-level), acting as a mediating factor with in this relationship.

Details

International Journal of Innovation Science, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1757-2223

Keywords

Article
Publication date: 17 October 2023

Ahmed Mohamed Habib and Nahia Mourad

This study develops a robust model to measure intellectual capital efficiency (ICE). It also analyzes ICE across Gulf companies, sectors and countries.

Abstract

Purpose

This study develops a robust model to measure intellectual capital efficiency (ICE). It also analyzes ICE across Gulf companies, sectors and countries.

Design/methodology/approach

This study uses data envelopment analysis (DEA), the Malmquist productivity index (MPI), difference tests and additional analyses on a dataset consisting of 276 firm-year observations.

Findings

The findings indicate that the study model is robust to additional analysis. The results show significant differences in ICE between firms during the study period and noteworthy differences between countries, where the Qatari and Bahraini firms achieved the best ICE compared to other countries.

Practical implications

The results of this study have significant ramifications for increasing knowledge of ICE analysis models among relevant parties. In addition, the findings may affect trading strategies because investors and financiers are motivated by the potential for lucrative financial returns on their investments in companies that prioritize ICE strategies.

Originality/value

This research contributes to the literature by proposing a robust model for estimating the ICE. It also compares ICE across Gulf companies, industries and countries to shed light on their ICE challenges.

Details

Benchmarking: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1463-5771

Keywords

Article
Publication date: 13 June 2023

Ejaz Aslam, Aziz Ur Rehman and Anam Iqbal

The purpose of this study is to investigate the mediating role of intellectual capital (IC) on the association between corporate governance mechanism (CGM) and the financial…

Abstract

Purpose

The purpose of this study is to investigate the mediating role of intellectual capital (IC) on the association between corporate governance mechanism (CGM) and the financial efficiency of Islamic banks (Z-score, net investment income and loan to deposit) and verify it through standard mediation in the panel based on interaction.

Design/methodology/approach

The data of this study draws from 125 full-fledged Islamic banks and windows from 26 Organization of Islamic Cooperation (OIC) over the period of 2009 to 2019. A two-step system generalize method of moment estimation is used to test the hypotheses.

Findings

The results underwrite that the inclusion of IC as a mediating variable has influenced positively the corporate governance and financial efficiency of IBs. Besides, only CEO power and Shariah supervisory board positively affect the financial efficiency of IBs. While structural capital and relational capital positively affect the financial efficiency of IBs. Apart from that, results show that the CGM has a significant relationship with the IC value of IBs.

Research limitations/implications

These findings are valuable for policymakers and regulators to set policies to improve CG structure and effective use of IC resources to improve banking efficiency. Additionally, findings might be helpful for the bankers to proficiently use the IC as a premise to plan new strategies to get an upper hand in financial performance.

Originality/value

This study extends and contributes to the current literature by analysing the role of IC along with CG to boost the financial efficiency of banks in OIC countries.

Details

Corporate Governance: The International Journal of Business in Society, vol. 24 no. 1
Type: Research Article
ISSN: 1472-0701

Keywords

Open Access
Article
Publication date: 11 May 2023

Md. Tofael Hossain Majumder, Israt Jahan Ruma and Aklima Akter

This paper attempts to evaluate the impact of intellectual capital on bank performance in Bangladesh.

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Abstract

Purpose

This paper attempts to evaluate the impact of intellectual capital on bank performance in Bangladesh.

Design/methodology/approach

The authors analyze an unbalanced longitudinal data of 32 banks, which cover 318 observations of bank-year from 2010 to 2019. The study employs a dynamic panel model with the two-step system generalized methods of moments (SGMM).

Findings

The results show that bank performance is significantly positively affected by the intellectual capital (IC) in Bangladesh. In addition, the findings show that capital employed efficiency (CEE) is an essential determinant of bank performance rather than structural capital efficiency (SCE) and human capital efficiency (HCE) for the Bangladeshi banking sector.

Originality/value

This work is unique as no one has explored the impact of intellectual capital on Bangladesh's bank performance. The findings suggest that business owners, managers and policymakers who want to improve the efficiency of their organizations should spend continuously on IC and expand their investment into CEE, which includes both financial and physical resources, in order to obtain better bank performance.

Details

LBS Journal of Management & Research, vol. 21 no. 2
Type: Research Article
ISSN: 0972-8031

Keywords

Article
Publication date: 11 April 2023

Md. Jahidur Rahman and Hongyi Liu

This study aims to examine the impact of intellectual capital (IC) and its three components (human, structural and relational capital) on corporation performance in the Chinese…

Abstract

Purpose

This study aims to examine the impact of intellectual capital (IC) and its three components (human, structural and relational capital) on corporation performance in the Chinese transportation industry. In addition, this study also investigates auditor characteristics (both Big-N and non-Big-N auditors) as a moderating role to examine the relationship between IC and corporate performance.

Design/methodology/approach

The data include 398 firm-year observations of transportation companies listed on the Shanghai and Shenzhen Stock Exchange from 2011 to 2020. Value-added intellectual coefficient (VAIC) model and its modified version (MVAIC) are applied to measure IC efficiency. Finally, the fixed effects regression analysis is used to mitigate the endogeneity issue. To investigate the moderating effect of auditor characteristics, the authors divide the samples based on the clients audited by Big-4 and non-Big-4 firms.

Findings

This study reveals that IC can enhance firm performance in China’s transportation sector. Overall, findings indicate that on the whole, IC has a positive and significant impact on corporation profitability and productivity. Human capital and physical and financial assets (capital employed) play highly important roles, but structural capital has no significant impact. The authors also found that auditor characteristics play an important moderating role in the connection between IC and corporate performance. For example, the positive association between IC and corporate performance is more pronounced when Big-4 auditors audit client firms. At the same time, the authors found a negative relationship between IC and firm performance when non-Big-4 auditors audit client firms.

Practical implications

Managers must understand that several components of IC have a total effect on corporate financial performance. Therefore, managers can dedicate more resources to such components based on the performance outcomes to emphasize their business strategies.

Originality/value

This study is the first empirical analysis of the impact of IC and its components on corporation performance in the transportation sector in China, an emerging market. Previous studies mainly focus on developed countries’ high technology and financial industries sectors but the impact of IC in transportation industry largely remains unknown. Thus, the present findings contribute to IC literature by revealing several underlying mechanisms by which the components of IC help achieve good firm performance.

Details

Asian Review of Accounting, vol. 31 no. 4
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 14 June 2023

Omar Al Farooque, Rayed Obaid Hammoud AlObaid and Ashfaq Ahmad Khan

This study explores, first, the performance effect (accounting- and market-based performance) of intellectual capital (IC), measured using the value-added intellectual coefficient…

Abstract

Purpose

This study explores, first, the performance effect (accounting- and market-based performance) of intellectual capital (IC), measured using the value-added intellectual coefficient (VAIC) and its modified version (MVAIC), on Islamic and conventional listed banks in Gulf Cooperation Council (GCC) countries and, second, whether Islamic banks outperform conventional banks in utilising IC.

Design/methodology/approach

Using resource-based view theory and literature reviews, regression analyses are conducted on data for the period 2012–2019 on 26 Islamic and 42 conventional banks. For hypothesis testing, the generalised method of moments panel data regression analysis is applied after addressing endogeneity issues.

Findings

Results, after controlling for corporate governance, indicate that the performance effects of IC (VAIC and MVAIC) on both bank types largely converge and Islamic banks do not outperform conventional banks in IC use. IC has a stronger effect on accounting performance measures for conventional banks than for Islamic banks, but IC has some effect on market performance measures for Islamic banks alone. Corporate governance variables do not play a significant role in the presence of VAIC and MVAIC although there are differences in corporate governance between the two bank types.

Originality/value

This study bridges the gap in GCC banking sector literature on the association between IC efficiency and performance measures of Islamic and conventional banks, from a comparative perspective. It enhances understanding, about the IC–financial performance nexus, of policymakers, regulators, bank managers and other stakeholders interested in the influence of different business models, financing/investment methods and governance structure on the performance of both bank types.

Article
Publication date: 10 February 2022

Erhan Akkas and Mehmet Asutay

This paper aims to evaluate the impact of intellectual capital in terms of human capital, structural capital and capital employed on the financial performance of Islamic and…

Abstract

Purpose

This paper aims to evaluate the impact of intellectual capital in terms of human capital, structural capital and capital employed on the financial performance of Islamic and conventional banks in the Gulf Cooperation Council (GCC) countries.

Design/methodology/approach

Along with the measurement discussion, the empirical analysis examines the relationship between intellectual capital measured through value-added intellectual coefficient (VAIC) and the financial performance of banks in the GCC states by conducting a panel of six GCC countries, including 24 Islamic banks and 32 conventional banks covering 2012–2020 period.

Findings

This paper shows that while Islamic banks have similar VAIC, human capital efficiency and capital employed efficiency results to conventional banks, Islamic banks have lagged behind conventional banks regarding the impact of structural capital on financial performance. It is argued that this is in contradiction with Islamic ontology and epistemology, which essentialises intellectual capital formation.

Practical implications

Islamic banks should promote research and development for their intellectual capital at the product, operational and institutional levels, as Islamic banking is considered an alternative financing method, incorporating a new form of knowledge-based institutions inspired by capitalist institutions.

Originality/value

This study conducts a comparative examination of the intellectual capital performance and its impact on financial performance by using interaction variables to capture any differences between Islamic banks and conventional banks in the GCC countries. The paper also considers the knowledge economy impact as a novelty, which is prominent for the GCC countries. In addition, Islamic ontology’s essentialisation of knowledge and its articulation in the form of intellectual capital within modern understanding is widely discussed, as part of originality. Finally, the findings are located within Islamic ontology and epistemology.

Details

Journal of Financial Reporting and Accounting, vol. 21 no. 5
Type: Research Article
ISSN: 1985-2517

Keywords

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