scholarly journals Determining the Impact of Intangible Assets on Intellectual Capital and Competitive Advantage in Banking

2020 ◽  
Vol 9 (1) ◽  
pp. 105-144
Author(s):  
Ramla Sadiq ◽  
Safia Nosheen
Keyword(s):  
Competitive Advantage ◽  
Intellectual Capital ◽  
Banking Sector ◽  
Intangible Assets ◽  
Robustness Analysis ◽  
Secondary Data ◽  
Annual Reports ◽  
Islamic Banks ◽  
Conventional Banks ◽  
The Impact

This paper carries out the empirical tests in order to validate the hypothesis that resource intangibility, in the form of intangible assets, contributes towards the intellectual capital, and the competitive advantage in the banking sector. Furthermore, it also determines whether the intangibility of a banks' resources contribute towards the sustainability of the competitive advantage. Finally, it determines which aspects of the banking performance, the intangible assets actually contribute to. In this context, this research utilizes the secondary data, which is extracted from the annual reports of commercial banks that are listed on the primary stock exchanges of Pakistan. The sample that is taken into consideration is divided into two main categories in order to carry out the analysis. These categories include the classification into the Islamic banks and the conventional banks. The Islamic window operations have not been included in the analysis,as the details required for the variable calculations are not consistently available. Moreover, this bifurcation in the sample is also a unique aspect of this research,as the prior literature primarily focuses on the determinants of the intellectual capital in the banking sector. However though, there is no direct study regarding the differences in the resource intangibility in the Islamic banks and the conventional banks, and their subsequent impact on the intellectual capital and competitive advantage. The time frame for the analysis is taken from the year FY2008-FY2018 .Also,the findings of this study lead to striking implications for both the Islamic banking theory and the managerial practices in the banking sector of Pakistan. The resource intangibility is to be managed very differently across both categories. Where the intangible assets represent a significant contribution to both the intellectual capital and the competitive advantage for Islamic banks, the yal sore present a negligible impact on the intellectual capital,and the competitive advantage for conventional banks. This holds true for the conventional performance measures that are taken for the banking sector as well, as shown in the robustness analysis.

scholarly journals The Impact of Financial Performance on Corporate Social Responsibility: An Empirical Analysis of Conventional and Islamic Banks of Pakistan

2018 ◽  
Vol 2 (2) ◽  
pp. 01-18
Author(s):  
Ummara Fatima ◽  
Uzma Bashir
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Performance ◽  
Banking Sector ◽  
Annual Reports ◽  
Islamic Banks ◽  
Conventional Banks ◽  
Corporate Social ◽  
The Impact ◽  
The Relationship

The study explores how financial performance (FP) affects the corporate social responsibility (CSR) of the banking sector of Pakistan. Further, it also elaborates the comparison between FP and CSR of Islamic and conventional banks of Pakistan. The study is based on the annual reports of banks listed at Pakistan Stock Exchange (PSE) for the years 2010-2016. The study used several panel data diagnostic tests and three regression models to check the relationship between FP and CSR of Islamic and conventional banks of Pakistan, while taking leverage and size as control variables. The results indicate that in case of conventional banks the relationship between ROE and CSR is negative. Here, the results are consistent with the agency theory which states that investment in CSR related activities is a waste of resources. While return on asset (ROA) is depicting negative and insignificant relationship with CSR, which depicts that FP does not have any impact on the investment in CSR initiatives. In the case of Islamic banks, the relationship between return on equity (ROE) and CSR is positive and significant. Here, the results support social contract and stakeholder theories. The research has important practical consequences that will help the banking industry managers to adopt optimal investment strategies about CSR related activities. The study provides guidelines to conventional banks to invest more in CSR in the same way Islamic banks are doing. The findings of the study lay some foundations upon which a more detailed analysis of CSR of banks could be based.

scholarly journals ISLAMICITY FINANCIAL PERFORMANCE INDEX PERBANKAN SYARIAH DI INDONESIA

2019 ◽  
Vol 5 (1) ◽  
pp. 99-112
Author(s):  
Dinaroe Dinaroe ◽  
Indra Mulya ◽  
Evi Mutia
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Performance Index ◽  
Good Governance ◽  
Secondary Data ◽  
Profit Sharing ◽  
Annual Reports ◽  
Islamic Banks ◽  
Purposive Sampling ◽  
The Impact

This research aims to examine the impact of Intellectual Capital and Good Governance Business Syariah (GGBS) towards Islamicity Financial Performance Index proxied by Profit Sharing Ratio (PSR). The data used is secondary data obtained from annual reports and the GCG implementation report that was published by the Islamic banks in the period of 2012 to 2016. This is a hypothesis testing research using purposive sampling method with 11 Islamic banks as the object of the research. The analysis method used is multiple regression analysis and the result partially shows that GGBS has a significant influence on Islamicity financial performance index, whereas intellectual capital does not.While, simultaneous testing shows both variables affect the islamicity financial performance index Islamic bank. Keywords: intellectual capital, GGBS, profit sharing ratio, Islamicity financial performance index  Abstrak Penelitian ini bertujuan untuk menguji pengaruh Modal Intelektual dan penerapan Good Governance Business Syariah terhadap Islamicity Financial Performance Index yang diproksikan dengan Profit Sharing Ratio (PSR). Data yang digunakan merupakan data sekunder yang berasal dari laporan tahunan (annual report) dan laporan pelaksanaan GCG yang dipublikasikan pada website masing-masing Bank syariah selama periode 2012-2016. Penelitian hipotesis ini menggunakan purposive sampling sebagai pengambilan sampel dengan 11 Bank Umum Syariah sebagai objek penelitian. Metode analisis yang  digunakan adalah analisis regresi linear berganda, dan hasil penelitian menunjukkan bahwa secara parsial modal intelektual tidak berpengaruh terhadap Islamicity Financial Performance Index perbankan syariah, sedangkan penerapan Good Governance Business syariah berpengaruh signifikan terhadap Islamicity Financial Performance Index. Pengujian secara simultan menunjukkan bahwa kedua variabel berpengaruh signifikan terhadap Islamicity Financial Performance Index Perbankan Syariah.

Fair value and banking contagion

2016 ◽  
Vol 7 (3) ◽  
pp. 215-236 ◽  
Author(s):  
Leila Gharbi ◽  
Halioui Khamoussi
Keyword(s):  
Data Model ◽  
Banking Sector ◽  
Fair Value ◽  
Islamic Banks ◽  
Fair Value Accounting ◽  
Content Type ◽  
Gcc Countries ◽  
Conventional Banks ◽  
Value Changes ◽  
The Impact

Purpose This paper aims to explore empirically the impact of fair value accounting on banking contagion in a comparative context between Islamic banks and conventional banks. Design/methodology/approach The analysis of the impact of fair value changes on banking contagion is carried out through a panel data model. This study covers 20 Islamic banks and 40 conventional banks operating in the Gulf Cooperation Council (GCC) countries during nine years from 2003 to 2011. Findings Empirical evidence shows that there is a significant change in dynamic volatility in GCC banking sector because of financial crisis 2008. However, results fail to confirm the hypothesis that fair value accounting is significantly associated with an increase of banking contagion for both Islamic and conventional banks operating in GCC countries. Originality/value The outcome of this study provides some insights for academicians, accountants as well as regulators in terms of enhancing the effectiveness of accounting practices.

COMPETITION-STABILITY RELATIONSHIP IN DUAL BANKING SYSTEMS: EVIDENCE FROM EFFICIENCY-ADJUSTED MARKET POWER

2021 ◽  
pp. 1-24
Author(s):  
MUDEER AHMED KHATTAK ◽  
OMAR ALAEDDIN ◽  
MOUTAZ ABOJEIB
Keyword(s):  
Market Power ◽  
Financial Stability ◽  
Banking Sector ◽  
Market Competition ◽  
Policy Implications ◽  
Islamic Banks ◽  
Banking Competition ◽  
Precise Measure ◽  
Conventional Banks ◽  
The Impact

This research attempts to explore the impact of banking competition on financial stability employing a more precise measure of market power. It was found that Islamic banks are less stable and are enjoying lower market power. The analysis shows that higher market competition makes the banking sector vulnerable to defaults, supporting the “competition-fragility view”. This research finds no difference in the relationship for Islamic banks indicates that Islamic banks might be involved in traditional banking activities as conventional banks. The results are consistent and robust to different estimation approaches and subsamples. This research carries regulatory and policy implications.

Intellectual capital and performance of Islamic and conventional banking

2019 ◽  
Vol 38 (7) ◽  
pp. 518-537 ◽  
Author(s):  
Amina Buallay
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Positive Relationship ◽  
Banking Sector ◽  
Market Performance ◽  
Value Added ◽  
High Tech ◽  
Islamic Banks ◽  
Content Type ◽  
Conventional Banks

Purpose Intellectual capital (IC) is considered as a lifeblood of the high-tech and knowledge-based sectors. Therefore, there is a great need to highlight the importance of IC in the banking sector. Since the banking sector in the gulf countries is mainly based on Islamic and conventional banking, the purpose of this paper is to provide a comparative empirical analysis between IC efficiency in Islamic and conventional banks, and its impacts on a bank’s operational, financial and market performance. Design/methodology/approach This study examined 59 banks for five years to end up with 295 observations. The independent variable is the modified value added IC components; the dependent variables are performance indicators (return on assets, return on equity and Tobin’s Q). Two control variables are utilized in this study: bank-specific and macroeconomic. Findings The findings deduced from the empirical results demonstrate that there is a positive relationship between IC efficiency and financial performance (ROE) and market performance (TQ) in Islamic banks. However, in conventional banks, there is a positive relationship between IC and operational performance (ROE) and financial performance (ROE). Originality/value The results of this study can be used to present a successful model for the Islamic and conventional banks to concentrate more on the role of IC in enhancing the bank’s performance. In addition, the results of this study may provide a wake-up call for Islamic banks to examine the reasons for the imperfect relationship between the IC and asset efficiency (ROA), as well as for conventional banks to examine the reasons for an imperfect relationship between the IC and market value (TQ).

scholarly journals The association between intellectual capital and financial performance in the Islamic banking industry

2019 ◽  
Vol 13 (1) ◽  
pp. 75-93 ◽  
Author(s):  
A.A. Ousama ◽  
Helmi Hammami ◽  
Mustafa Abdulkarim
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Positive Impact ◽  
Value Added ◽  
Annual Reports ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Content Type ◽  
Gcc Countries ◽  
The Impact

Purpose The purpose of this study is to empirically investigate the impact of intellectual capital (IC) on the financial performance of Islamic banks operating in the Gulf Cooperation Council (GCC) countries. Design/methodology/approach The study measures IC by the value added intellectual coefficient model. A regression analysis was used to assess the impact of IC on financial performance. The research sample consisted of Islamic banks operating in the GCC countries during the years 2011, 2012 and 2013. Data originated from the annual reports of Islamic banks. Findings The results support the thesis that IC has a positive impact on the financial performance of Islamic banks. Even though the average IC is lower than that reported in other studies, the positive effect on financial performance is obvious. The findings also show that human capital (HC) is higher than capital employed (CE) and structural capital (SC). The study reveals that SC has an insignificant impact on the financial performance of the Islamic banks compared to CE and HC. Practical implications The findings provide empirical evidence that IC affects the Islamic banks’ financial performance. It helps Islamic banks in the GCC countries to understand how to use their IC efficiently, especially SC as it is yet to be used efficiently. Also, the findings benefit the relevant authorities (e.g. legislators and central banks) who could use them to emphasise strategic policy reforms whenever required. Originality/value The current research adds to the empirical studies in the GCC countries as it views the region as a collective as opposed to individual countries. It also extends the IC and performance measurement literature of Islamic banks in the GCC countries. Moreover, the current study enriches the limited literature on IC in the context of Islamic banking.

Intellectual capital efficiency and bank’s performance

2019 ◽  
Vol 31 (4) ◽  
pp. 672-694 ◽  
Author(s):  
Amina Buallay ◽  
Richard Cummings ◽  
Allam Hamdan
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Positive Relationship ◽  
Market Performance ◽  
Value Added ◽  
High Tech ◽  
Islamic Banks ◽  
Content Type ◽  
Conventional Banks ◽  
The Impact

Purpose Intellectual capital (IC) plays a pivotal role in the high-tech and knowledge-based economic sectors. With the emergence of FinTech, which, with respect to the banking sector, is merging high-tech with the k-economy, there is an emerging need to highlight the importance and understand the dynamics of bank IC. With respect to Gulf Cooperation Council (GCC) economies, where FinTech has become de rigueur, banking is bifurcated into Islamic and banking sectors. Through comparative empirical analysis, the purpose of this paper is to examine IC efficiency in Islamic and conventional banks with a view to elucidating the impact of IC, in aggregate and decomposed into its components, on an operational, financial and market performance of Islamic banks juxtaposed with conventional banks. Design/methodology/approach Using data collected from 59 banks for five years (2012-2016) involving 295 observations, an independent variable derived from the modified value added IC (MVAIC) components are regressed against dependent bank performance indicator variables [Return on Assets (ROA), Return on Equity (ROE) and Tobin’s Q (TQ)]. Two types of control variables complete the regression analysis in this study: bank-specific and macroeconomic. Findings The findings elicited from the empirical results demonstrate that there is positive relationship between IC efficiency and financial performance (ROE) and market performance (TQ) in Islamic banks. In conventional banks, however, there is a positive relationship between IC and operational performance (ROE) and financial performance (ROE). Originality/value The model in this paper presents a valuable analytical framework for exploring IC efficiency as a driver of performance in dual-sector banking economies characterized by co-existence of Islamic and conventional financial institutions. In addition, this paper highlights bank management lacunae manifesting in terms of the weak nexus between: IC and asset efficiency (ROA) in Islamic banks and IC and market value (TQ) in conventional banks.

Incentives for conventional banks for the conversion into Islamic banks: evidence from Bangladesh

2020 ◽  
Vol 11 (2) ◽  
pp. 273-287
Author(s):  
Yasushi Suzuki ◽  
S.M. Sohrab Uddin ◽  
A.K.M. Ramizul Islam
Keyword(s):  
Secondary Data ◽  
Current Mode ◽  
Regulatory Framework ◽  
Annual Reports ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Reserve Requirement ◽  
Content Type ◽  
Islamic Countries ◽  
Conventional Banks

Purpose The skyrocketing rise of Islamic banking is noticeable in not only Islamic countries but also non-Islamic countries during the past few decades. Many conventional banks have started Islamic banking generally by maintaining separate branches/windows and occasionally by pursuing a complete conversion strategy. Following the global trend, two of the full-fledged Islamic banks adopted a conversion strategy consecutively in 2004 and 2008 in Bangladesh. The number of the conversion case is still limited. At this backdrop, this study aims to identify the incentives in the conversion strategy into Islamic banks. Design/methodology/approach Using the secondary data from the annual reports of the sample banks for both pre- and post-conversion periods, this study adopts the “case study” approach upon the comparison with the performance of conventional banks and other types of Islamic banks. Findings It is apparent that higher reserve requirement for conventional banks provides the incentive for the conversion into Islamic banks given with less reserve requirement. Under the protective regulatory framework, these converted Islamic banks may have enjoyed the rent for learning during the initial phase after the conversion, even though majority of the funds of these banks are collected from high-cost mudaraba time deposits. Basically, the credit strategy of the converted banks has been quite conservative, resulting in the concentrated portfolio selection on the asset-backed financing. However, the recent engagement of these banks in the Shari'ah-based participatory financing makes their performance a bit vulnerable. Research limitations/implications It is becoming difficult to justify a protective regulatory framework for incubating infant Islamic banks if the rent for learning given under the framework would not encourage them to challenge and absorb the risk and uncertainty associated with Shari’ah-based participatory financing. The current mode of profit–loss sharing (PLS) makes it difficult for the regulators to create an appropriate incentive for Islamic banks to challenge the equity-based financing. Originality/value The number of the conversion case is limited. Less has been done to investigate the reasons why the conventional banks opt for the conversion into Islamic banks, particularly in Bangladesh.

scholarly journals Internet Banking and its Impact on the Service Quality of the Banks in Punjab

2014 ◽  
Vol 5 (2) ◽  
pp. 748-757
Author(s):  
Rajni Bhalla ◽  
Inderpal Singh
Keyword(s):  
Service Quality ◽  
Banking Sector ◽  
Positive Impact ◽  
Secondary Data ◽  
Internet Banking ◽  
Annual Reports ◽  
Primary Data ◽  
Probability Method ◽  
The Impact

The changes in IT sector constantly influencing the performance of banking sector in the world. The emergence of internet banking has changed the way of banks of how to offer the products and services to the customers. In order to survive in the rapidly changing technological environment, the banks are required to adapt such changes and to maintain and improve the services which they are offering to their customers in order to attain the customers satisfaction. Now the term quality does not only include the products but also the services. This paper deals with the internet banking operations and how it affects the service quality of the banks in Punjab. The research is much more of qualitative nature but to prove facts and figures quantitative approach is also used in the paper. The research is descriptive as well as explanatory. In order to arrive at the sample size, non probability method has been used. For the primary data collection a structured questionnaire is used to record the response of various respondents. Secondary data has been collected from annual reports, other published literature of the banks etc. In order to test the impact of internet banking on the service quality of banks seven service quality dimensions model is used. A model with seven dimensions service quality named reliability, assurance, responsiveness, empathy, tangibility, security and communication is used to complete the study. In these seven dimensions 37 variables are covered. For the data analysis the statistical package SPSS 20 is used.  Descriptive statistics is used to analyse the data. The research proves that all the dimensions which are included in the study have a positive impact on the service quality of banks providing internet banking services to their customers in Punjab. The recommendations are also discussed with which the service quality and customers satisfaction can be improved.

scholarly journals Studi Empiris Kekuatan Stabilitas Keuangan Perbankan Syariah di Indonesia

2019 ◽  
Vol 8 (2) ◽  
pp. 147
Author(s):  
Elok Heniwati
Keyword(s):  
Banking Sector ◽  
Global Financial Crisis ◽  
Stock Exchange ◽  
Secondary Data ◽  
Annual Reports ◽  
Islamic Banking ◽  
Insolvency Risk ◽  
Conventional Banks ◽  
The Stability ◽  
The Global Financial Crisis

The study aims to examine the stability of Islamic banking in Indonesia after the global financial crisis. This study is significant, considering the rapidly growth of Islamic banking in Indonesia and uniqueness of its operating systems and products. By using secondary data from the annual reports of the banking sector listed on the Indonesia Stock Exchange (IDX) for the period from 2013 to 2016, regression analysis with the ZSCORE function (insolvency risk) as the dependent variable and a number of predictor variables (firm-specific, macroeconomic and governance) are used as tools for achieving research objectives. To check the robustness of the research findings, a model with different specifications has been used. The results indicate that profitability and firm size have a significant influence on the insolvency risk (ZSCORE) of banks and empirical factors that influence these risks differ between Islamic banks and conventional banks.

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