scholarly journals Intellectual Capital Performance and Profitability of Banks: Evidence from Pakistan

2019 ◽  
Vol 12 (2) ◽  
pp. 56 ◽  
Author(s):  
Muhammad Haris ◽  
HongXing Yao ◽  
Gulzara Tariq ◽  
Ali Malik ◽  
Hafiz Javaid
Keyword(s):  
Intellectual Capital ◽  
Negative Impact ◽  
Positive Impact ◽  
Value Added ◽  
Bank Profitability ◽  
Policy Makers ◽  
Structural Capital ◽  
Capital Efficiency ◽  
The Impact ◽  
Country Specific

The study contributes to the existing literature on intellectual capital (IC) performance and profitability by extending evidence from Pakistan. The study examines the impact of IC performance on the profitability of Pakistani financial institutions. It further examines how corporate governance, bank specific, industry specific, and country specific indicators effect Pakistani banks’ profitability. The result reports both the linear and non-linear impact of IC performance on profitability, which affirms an inverted U–shaped relationship. Among the three value added intellectual coefficient (VAIC) components, capital employed efficiency (CEE), and human capital efficiency (HCE) are found to have a significantly positive and structural capital efficiency (SCE) is found to have a significantly negative impact on bank profitability. The study notes a positive impact on profitability of factors like board independence, directors’ compensation, and higher capitalization. It reports a negative impact on profitability of factors like board size, board meetings, credit risk, industry concentration and economic growth. The results also indicate low profitability of banks during the period of government transition. The study provides insights into the important profitability drives and suggests that the impact of investment in IC on profitability is limited to an extent. The findings of this study are likely to be useful for policy makers, management, and academics.

scholarly journals Should Listed Banks Be Concerned with Intellectual Capital in Emerging Asian Markets? A Comparison between China and Pakistan

2019 ◽  
Vol 11 (23) ◽  
pp. 6582 ◽  
Author(s):  
Xu ◽  
Haris ◽  
Yao
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Positive Impact ◽  
Value Added ◽  
Bank Performance ◽  
Bank Profitability ◽  
Structural Capital ◽  
Chinese Banks ◽  
Capital Efficiency ◽  
The Relationship

The purpose of this study is to determine and compare the relationship between intellectual capital (IC) and banks’ performance in China and Pakistan. The data are acquired from listed banks in these two countries during 2010–2018. The Value Added Intellectual Coefficient (VAIC™) method is applied as a measure of IC. The results show that capital employed efficiency (CEE) makes the highest contribution to bank performance in both countries. In addition, the profitability of listed Chinese banks is driven by structural capital efficiency (SCE), while human capital efficiency (HCE) positively affects bank profitability and productivity in Pakistan. In addition, we find that the lagged effect of IC has a positive impact on future bank profitability. This study supports greater investment in IC in order to further improve bank performance in emerging Asian markets.

scholarly journals Intellectual capital and financial performance: Case of the emerging market banks

2021 ◽  
Vol 10 (1) ◽  
pp. 35-41
Author(s):  
Hadeel Yaseen ◽  
Asma’a Al-Amarneh
Keyword(s):  
Intellectual Capital ◽  
Positive Impact ◽  
Stock Exchange ◽  
Emerging Market ◽  
Value Added ◽  
Return On Assets ◽  
Structural Capital ◽  
Amman Stock Exchange ◽  
Capital Efficiency ◽  
The Impact

Using the value added intellectual capital (VAIC) this study aims to investigate the impact of intellectual capital (IC) on the performance of Jordanian banks listed in the Amman Stock Exchange (ASE) during the years 2005-2018. Two empirical models were designed to test the effect of VAIC, and its three components including capital employed efficiency (CEE), human capital efficiency (HCE) and structural capital efficiency (SCE) on banking performance. The results of the study show that there is a significant and positive relationship between VAIC and banks profitability presented by return on assets (ROA). Meanwhile, when VAIC is split into components, SCE, CEE and HCE have a significant and positive impact on banks performance. Yet, CEE has more influence on performance compared to HCE and SCE. This study contributes to the literature as well as practitioners in financial institutions by providing evidence on the influence of intellectual capital on banks performance in an emerging economy, Jordan, in which its national vision and strategy emphasize the importance of intellectual capital in sustaining its economic growth.

scholarly journals The Impact of Intellectual Capital on Financial Performance: A Study of Sri Lankan Financial Institution

2021 ◽  
Vol 04 (09) ◽  
Author(s):  
A. Nishanthini ◽  
Keyword(s):  
Human Capital ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Negative Impact ◽  
Financial Institution ◽  
Value Added ◽  
Sri Lankan ◽  
Structural Capital ◽  
Capital Efficiency ◽  
The Impact

Intellectual Capital is essential in every economical activity. The aim of this study how intellectual capital impact on financial performance in Sri Lankan financial institution. To achieve objective of this research banking institution has been selected from Colombo Stock Exchange financial directory for the period from 2016 to 2020. Random sampling technique were used to analysis the data. MVIAC model used for the measurement of independent variable in this study. This model is a composite sum of two indicators these are Capital Employed Efficiency (CEE) - indicator of VA efficiency of capital employed and Intellectual Capital Efficiency (ICE) – indicator of value-added efficiency ofcompany’s Intellectual Capital base. Intellectual Capital Efficiency is composed of (a) Human Capital Efficiency (HCE) – indicator of value-added efficiency of human capital; and (b) Structural Capital Efficiency (SCE) – indicator of value-added efficiency of structural capital (c) Rational Capital Efficiency (RCE). Finding represent that intellectual capital has significant impact on financial performance of Sri Lankan financial institution, specially banking industry. SCE and CEE has negative impact while RCE impact positively on financial performance.

scholarly journals Measuring intellectual capital efficiency: A case of football clubs in the UEFA Champion League

2020 ◽  
Vol 4 (1) ◽  
pp. 30-40
Author(s):  
Md. Jahidur Rahman ◽  
Siyan Ding
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Positive Impact ◽  
Value Added ◽  
Sports Industry ◽  
Structural Capital ◽  
Football Clubs ◽  
Capital Efficiency ◽  
Almost All ◽  
Football Industry

The purpose of this study is to examine the intellectual capital efficiency of football clubs in the UEFA Champion League between 2010 and 2019. We measure the intellectual capital efficiency of each football club through Value Added Intellectual Coefficient (VAIC) method developed by Pulic (1998, 2004), Ghosh and Mondal (2009), Yalama (2013), Ozkan, Cakan, and Kayacan (2017). Using a sample of 10 football clubs from 7 countries, we find that almost all clubs use their intellectual capital efficiently with great coefficients. We also document that human capital, as the core of intellectual capital, has a positive impact on structural capital. Our finding is significant for sports managers to make strategic management of intellectual sources to create value in the football industry. It suggests that football clubs should pay more attention to intellectual capital like fan loyalty and talented players. Meanwhile, it helps the sports industry to play a great role of human capital in intellectual capital and to increase the competitive advantage of the enterprise.

scholarly journals Intellectual Capital Efficiency and Firm Performance of Technology, Telecommunication and Media Companies in Malaysia

2020 ◽  
Vol 4 (1) ◽  
pp. 133-145
Author(s):  
Ahmed Sharem
Keyword(s):  
Firm Performance ◽  
Intellectual Capital ◽  
Value Added ◽  
Annual Reports ◽  
Economic Policies ◽  
Policy Makers ◽  
Return On Equity ◽  
Media Companies ◽  
Structural Capital ◽  
Capital Efficiency

The main purpose of this paper is to study the association between intellectual capital efficiency (ICe) and firm performance of companies in the Technology and Telecommunications & Media (TT&M) sectors on the Malaysian main and ACE markets. Data were collected from 37 companies’ annual reports for the year 2018. Value added intellectual coefficient (VAIC) and its components were measured using Pulic’s model, whereas firm performance focuses on profitability, proxied by return on asset (ROA) and return on equity (ROE). VAIC, human capital efficiency (HCe) and Capital employed efficiency (CEe) are associated with significantly higher ROA and ROE. However, Structural capital efficiency (SCe) is not significant with either ROA or ROE. These findings have useful implications to the TT&M companies as their managers may improve on the efficient usage of the relevant capitals in order to gain better firm performance. Moreover, the findings of this study could also be beneficial to policy makers as the financial success of TT&M companies would be in line with national economic policies.    

The Relationship between Intellectual Capital and Banks' Productivity in Pakistan

2021 ◽  
pp. 158-169
Author(s):  
Muhammad Asim Afridi ◽  
Imran Khan ◽  
Muddassar Khan
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Productivity Growth ◽  
Banking Sector ◽  
Value Added ◽  
Malmquist Productivity Index ◽  
Productivity Index ◽  
Structural Capital ◽  
Capital Efficiency ◽  
The Impact

The performance of banks has been widely researched using accounting ratios, Tobin�s Q and market returns and less emphasis has been given to productivity measures. The productivity growth of banks is captured through Malmquist Productivity Index (MPI). The study then investigates the impact of intellectual capital on the productivity of banks in Pakistan. Value-added The intellectual Coefficient (VAIC) approach is employed to examine the intellectual capital of banks. Data is obtained from annual reports of 20 banks listed on the Pakistan Stock Exchange for 10 years (2007-2016). The panel corrected standard error approach is used for estimating the panel regression model. The findings provide evidence that the VAIC, human capital efficiency (HCE) and structural capital efficiency (SCE) has a positive impact on productivity growth (MPI). On the other hand, capital employed efficiency (CEE) has no significant impact on productivity growth. The VAIC approach may be useful for the banks and policymakers in a knowledge economy to integrate the intellectual capital in the decision-making process. Our results also suggest that banks in Pakistan shall increase spending on intellectual capital particularly on human capital and structural capital to elevate the intellectual capital of banks and subsequently get benefits in terms of increased productivity Keywords: Intellectual capital; Value added intellectual coefficient (VAIC); Malmquist productivity Index; Pakistan banking sector

THE IMPACT OF INTELLECTUAL CAPITAL ON CORPORATE PERFORMANCE: EVIDENCE FROM THE EGYPTIAN INSURANCE MARKET

2016 ◽  
Vol 20 (03) ◽  
pp. 1650034 ◽  
Author(s):  
MOHAMED SHERIF ◽  
MAHMOUD ELSAYED
Keyword(s):  
Intellectual Capital ◽  
Corporate Performance ◽  
Value Added ◽  
Financial Capital ◽  
Insurance Companies ◽  
Structural Capital ◽  
Capital Efficiency ◽  
And Performance ◽  
The Impact ◽  
Unobservable Heterogeneity

This paper examines, using various econometric techniques, the impact of intellectual capital (IC) on the performance of Egyptian insurance companies listed between 2006 and 2011. We measure IC using the value added intellectual coefficient (VAIC) approach and its components developed by Pulic (2000), and both a direct and a moderating relationship between VAIC and corporate performance are investigated. Our results show a direct relationship between (IC-VAIC) and the performance of Egyptian insurance companies, particularly with capital employed efficiency (CEE), and to a lesser extent with human capital efficiency. In addition, a positive relationship between IC (capital employed and structural capital) and performance in the prior and current years is found. Evidence also suggests the possibility of a moderating relationship between IC and physical and financial capital, which in turn impacts on corporate performance. Our study also reveals the importance of taking into account any unobservable heterogeneity and endogeneity issues when analysing corporate performance.

scholarly journals PENGARUH HUMAN CAPITAL, STRUCTURE CAPITAL, DAN PHYSICAL CAPITAL TERHADAP KINERJA PERUSAHAAN PERBANKAN DI INDONESIA

2019 ◽  
Vol 8 (1) ◽  
Author(s):  
Agustinus Jeneo
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Negative Impact ◽  
Stock Exchange ◽  
Value Added ◽  
Physical Capital ◽  
Return On Equity ◽  
Result Show ◽  
Capital Efficiency ◽  
The Impact

The objective of this study are to analyze the impact of intellectual capital (HumanCapital, Structure Capital and Physical Capital) on company’s financial performance Return on Assets (ROA) dan Return On Equity (ROE). This research used banking company data that listed in Indonesia Stock Exchange (IDX) 2011-2012. The model that used to measure intellectual capital was Pulic model agregatly-using Value Added Intellectual Coefficient (VAIC™) or separately-using Human Capital Efficiency (HCE), Structure Capital Efficiency (SCE), and Physical Capital/ Capital Employed Efficiency (CEE). The result show: (1) Human Capital Efficiency (HCE) not significant  impact on ROA, (2) Human Capital Efficiency (HCE) not significant impact on ROE, (3) Structure Capital Efficiency (SCE) not significant impact on ROA, (4) Structure Capital Efficiency (SCE) negative impact on ROE (5) Physical Capital/Capital Employed Efficiency (CEE) has a positive significant impact on ROA, (6) Physical Capital/Capital Employed Efficiency (CEE) has a positive significant impact on ROE

scholarly journals The Impact of Intellectual Capital on Firm Performance of the Turkish Real Estate Companies Before and After the Crisis

2018 ◽  
Vol 14 (1) ◽  
pp. 29 ◽  
Author(s):  
Sedeaq Nassar
Keyword(s):  
Firm Performance ◽  
Real Estate ◽  
Intellectual Capital ◽  
Value Creation ◽  
Positive Impact ◽  
Value Added ◽  
Significant Relation ◽  
Capital Efficiency ◽  
The Impact ◽  
Positive Significant Relation

Purpose- The main purpose of this study is to find the impact of intellectual capital on firm performance of real estate companies listed in Borsa Istanbul, using data of 27 listed companies over the period 2004-2015. Value Added Intellectual Coefficient (VAIC) method is utilized as a measure of intellectual capital (IC). Methodology- An OLS regression is used to examine the impact of intellectual capital (VAIC); Human capital efficiency (HCE), Structural capital efficiency (SCE), and Capital employed efficiency (CEE) on market, productivity, and financial performance. Findings- The findings show that SCE consider as a key role of value creation in real estate companies where has a positive significant relation with MB, ROE, and EPS before the crisis and with ROA and ROE after the crisis. HCE show a positive significant relation with ROA and ROE before the crisis and a negative significant association with MBand ATO after the crisis. CEE show a negative significant impact on ATO after the crisis. VAIC shows a significant positive impact on ROA, ROE, and EPS before the crisis, while it has the same relation with ROE after the crisis. Conclusion- Although the good result of using intellectual capital for value creation, real estate Turkish companies still weakly depend on its intellectual capital.

An Empirical Study of the Impact of Intellectual Capital on Business Performance

2011 ◽  
Vol 10 (01) ◽  
pp. 11-21 ◽  
Author(s):  
Samuel Kai Wah Chu ◽  
Kin Hang Chan ◽  
Ka Yin Yu ◽  
Hing Tai Ng ◽  
Wai Kwan Wong
Keyword(s):  
Hong Kong ◽  
Empirical Study ◽  
Intellectual Capital ◽  
Business Performance ◽  
Value Added ◽  
Business Success ◽  
Financial Indicators ◽  
Structural Capital ◽  
Capital Efficiency ◽  
The Impact

This empirical study examines the intellectual capital (IC) performance of Hong Kong companies and its association with business performance. Data were collected from constituent companies of the Hang Seng Index listed on the Hong Kong Stock Exchange (2005–2008). An IC measurement, Value Added Intellectual Coefficient (VAICTM), was utilised to evaluate the IC investment of the companies. Four accounting ratios: market-to-book value (MB), return on assets (ROA), asset turnover (ATO) and return on equity (ROE) were used as the indicators of business performance. Regression analyses were conducted to test the ability of IC and its components in order to explain the variance in business performance measures. No conclusive evidence was found to support the associations between VAICTM as an aggregate measure and the four financial indicators. However, components of VAICTM were found to predict a substantial variance in business performance. Capital Employed Efficiency (CEE) was found to be a key factor in predicting business financial performance. Structural Capital Efficiency (SCE) was found to have a significant effect on businesses' market valuation, as measured by MB, and on profitability, as measured by ROE. Negative correlations were found between Human Capital Efficiency (HCE) and the financial indicators. The findings indicate a gap between the traditional accounting perspective and the value creation perspective, which is central to the VAICTM methodology in measuring IC. It is believed that the findings of this research provide insights for business stakeholders of Hong Kong companies in utilising IC, particularly the noted impact of structural capital. While our findings indicate the importance of IC for corporations, as shown by the significant effect of SCE on ROE, physical and financial assets may still be considered as the key resources in delivering business success.

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