scholarly journals Empirical Linkage of Intellectual Capital and Performance of Islamic Banks

2019 ◽  
Vol 8 (5C) ◽  
pp. 677-684
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Positive Relationship ◽  
Value Added ◽  
Annual Reports ◽  
Bank Performance ◽  
Islamic Banks ◽  
Significant Positive Relationship ◽  
Banking Institutions ◽  
Capital Efficiency

With the eminence of the era of knowledge-based economies, the concept of intellectual capital (IC) is of vital importance for organisations to survive in these vigorous environments. As one of the knowledge intensive sectors, there is no exception to banking institutions in enhancing their intellectual capital efficiency to the forefront especially for Islamic banks (IBs) that have to compete with the firmlyestablished conventional banks. Accordingly, this study intends to measure the relationship between intellectual capital efficiency and banks’ performance. In total, 59 Islamic banks are selected and their audited annual reports are compiled from the banks’ websites respectively from year 2006-2017. Value-added intellectual coefficient (VAIC) are applied in measuring IC efficiency. The findings provide empirical evidences of positive relationship between IC efficiency and banks performance, nonetheless, when decomposes into human capital efficiency (HCE), structural capital efficiency (SCE) and capital employed efficiency (CEE), only human capital efficiency shows significant positive relationship with performance of the banks while the other two components show significant negative linkage with bank performance. Furthermore, due to criticisms towards VAIC method, this study using modified value-added intellectual capital coefficient (MVAIC) and found that MVAIC has significant positive relationship with bank performance while relational capital as additional variable in MVAIC regression model has no significant effect with bank performance. This study provides better insights on the importance of utilisation of IC by banking institutions particularly for Islamic banks.

scholarly journals Determinants of financial performance of Islamic banks: an intellectual capital perspective

2017 ◽  
Vol 8 (2) ◽  
pp. 130-142 ◽  
Author(s):  
Tasawar Nawaz ◽  
Roszaini Haniffa
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Positive Relationship ◽  
Value Added ◽  
Annual Reports ◽  
Content Type ◽  
Significant Positive Relationship ◽  
Accounting Performance ◽  
Capital Efficiency ◽  
The Impact

Purpose The purpose of this paper is to empirically examine the effect of intangible resources, i.e. intellectual capital (IC) on financial performance of 64 Islamic financial institutions (IFIs) operating in 18 different countries for the period 2007-2011, while controlling for firm-specific variables, namely, bank size, level of risk, listing status, and firm complexity. Design/methodology/approach The required data to calculate different constituents of IC are derived from Bankscope database. Value Added Intellectual Coefficient (VAIC) methodology devised by Pulic is used to determine the impact of IC on financial performance of IFIs. Findings Results indicate a significant positive relationship between VAIC and accounting performance based on return on assets (ROA). The results further indicate a significant positive relationship between accounting performance and capital employed efficiency (CEE) and human capital efficiency (HCE), but no significant relationship with regards to structural capital efficiency. Overall, the results suggest that value creation capability of IFIs is highly influenced by HCE and CEE. Research limitations/implications The main limitation of the present study lies in its methodological tool, the VAIC methodology, which has been criticized by some researchers as not really measuring IC. Despite the inherent limitation of the VAIC methodology which relies on secondary data published in annual reports, it is still considered by some researchers as one of the best available tool to measure firms’ IC in the absence of access to detailed internal information on IC. Practical implications The findings may serve as a useful input for Islamic bankers in managing their investments in IC within their institutions. Originality/value The main contribution of this paper is to use a previously little-studied area, Islamic banking and finance, to identify the effect of intellectual capital on performance.

The Analysis of Intellectual Capital Performance of Islamic Bank in Indonesia

2014 ◽  
Vol 2 (4) ◽  
pp. 53-60
Author(s):  
Radhiyatul Fitriyeni ◽  
Yurniwati Yurniwati
Keyword(s):  
Correlation Analysis ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Sampling Method ◽  
Positive Relationship ◽  
Value Added ◽  
Company Performance ◽  
Islamic Banks ◽  
Capital Efficiency ◽  
The Relationship

Objective - The purpose of this paper was to assess the influence of Value Added Intellectual Capital (VAIC) towards company performances such as: profitability and productivity of Islamic banks of Indonesia measured by ROA, ROE, ROI and ATO. Methodology/Technique - This research conducted purposive sampling method. Correlation analysis was applied to measure the influence of ICE on company Performance. SPSS 18 was applied for correlation test. VAIC was calculated for measuring intellectual capital efficiency. Findings - VAIC had a positive relationship to company performance such as financial performance and productivity. The highest value of correlation was the relationship between VAIC and ATO. The lowest value of correlation was the relationship between VAIC to ROE. Novelty - This research assessedthe influence of VAIC towards 11 Islamic Banks in Indonesia. Type of Paper - Empirical Keywords: Intellectual capital, VAIC, corporate performance, financial performance, productivity, Indonesia, Islamic Banks.

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 Impact of Intellectual Capital on Financial Performance of Banks in Tanzania

2015 ◽  
Vol 1 (1) ◽  
pp. 17-24 ◽  
Author(s):  
Janeth N. Isanzu
Keyword(s):  
Human Capital ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Value Added ◽  
Physical Capital ◽  
Annual Reports ◽  
Balance Sheets ◽  
Structural Capital ◽  
Knowledge Based Economy ◽  
Capital Efficiency

Since the financial sector reforms took place in the last two decades, Banks in Tanzania have continued to play the major role in reshaping the economy of the nation. With the emergence of knowledge based economy many firm have changed their way of doing business instead of relying more on physical capital they have shifted to intellectual capital. This is no exception for the banks operating in developing counties Tanzania included. Many studies have been done in the area of intellectual capital and its contribution to the value of the firm. This study sets out to extend the evidence by investigating the intellectual capital of banks operating in Tanzania for the period of four years from 2010 to 2013. Annual reports, especially the profit and loss accounts and balance sheets of the selected banks have been used to obtain the data. The study uses Value Added Intellectual Capital model (VAICTM) in determining intellectual capital and its three major components like Human Capital Efficiency (HCE) Structural capital efficiency (SCE) and Capital Employed Efficiency (CEE). The results revealed that Intellectual capital has a positive relationship with financial performance of banks operating in Tanzania and also when the VAICTM was divided into its three components it was discovered that the financial performance is positively related to Human capital efficiency and Capital employed efficiency but is negatively related to Structural capital efficiency.

scholarly journals Proprietary costs of intellectual capital reporting: Malaysian evidence

2015 ◽  
Vol 23 (3) ◽  
pp. 275-292 ◽  
Author(s):  
Hasnah Kamardin ◽  
Robiah Abu Bakar ◽  
Rokiah Ishak
Keyword(s):  
Human Capital ◽  
Financial Reporting ◽  
Intellectual Capital ◽  
Stock Exchange ◽  
Value Added ◽  
Annual Reports ◽  
Content Type ◽  
Reporting Practices ◽  
Capital Efficiency

Purpose – The purpose of this paper is to examine the relationship between intellectual capital (IC) performance (value-added intellectual coefficient (VAIC)) and company characteristics with IC disclosure (ICD) in Malaysian listed companies. Design/methodology/approach – Sample of the study is 68 biggest Malaysian companies listed in Malaysian Stock Exchange based on market capitalization in year 2006. The paper follows the classification of ICD by Huang et al. (2007), with three broad IC categories in 45 items. Content analysis was used to collect the IC information from the annual reports. Regression analysis was conducted for VAIC and its components. Log linear analysis was also conducted to cater the possible misspecification in the model. Findings – Results of the study show that VAIC is negatively related to ICD. Further classification of VAIC shows that intellectual capital efficiency and human capital efficiency are negatively related to ICD whilst structural capital efficiency is not related to ICD. Company size and leverage are found to be positively related to ICD. Research limitations/implications – Negative association between VAIC and ICD suggests that companies reduce ICD for competitive advantage reason which supports the proprietary cost theory. The findings of the study may provide some evidence to regulators to enhance the reporting practices of IC for the benefits of users of financial reporting in making relevant decisions. The focus should be given on the reporting of human capital items. Originality/value – This is the first paper to use IC framework by Huang et al. (2007). Consistency of findings with other studies using different IC framework can be compared for the choice of IC framework in future studies.

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 Human Capital Efficiency and Financial Performance: Empirical Evidence of Malaysian Public Companies.

2018 ◽  
pp. 878-884
Author(s):  
Azlina Rahim ◽  
Amrizah Kamaluddin ◽  
Ruhaya Atan
Keyword(s):  
Human Capital ◽  
Financial Performance ◽  
Value Added ◽  
Annual Reports ◽  
Public Companies ◽  
Accounting Data ◽  
Return On Equity ◽  
Capital Efficiency ◽  
Financial Performance Measures ◽  
The Relationship

The purpose of this study is to investigate empirically the relationship between human capital efficiency and financial performance of Malaysian public companies. Using accounting data, this study reviewed the annual reports of Malaysian companies for a period of thirteen years from 2000 to 2012. The study applied Value Added Intellectual Coefficient (VAICTM) methodology developed by Ante Pulic to determine the human capital efficiency of a company. The regression models was construct to examine the relationship between human capital efficiency and financial performance measures including return on assets (ROA) and return on equity (ROE).The results revealed that human capital efficiency has significant and positive relationships with financial performance. The human capital efficiency is seen as a value driver for a company’s competitiveness. Hence, the findings of this study should help companies’ managers to make better decision pertaining to investment of their strategic asset that is human capital.

scholarly journals Intellectual Capital Terhadap Nilai Pasar Dan Kinerja Keuangan Perusahaan Dengan Value Added Intellectual Capital (Studi Pada Perusahaan Manufaktur di Bursa Efek Indonesia Tahun 2008-2011)

2019 ◽  
Vol 7 (2) ◽  
pp. 43
Author(s):  
Sofie Sofie ◽  
Ari Prihartini ◽  
Rinda Liana
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Firm Value ◽  
Statistical Tests ◽  
Value Added ◽  
Market Value ◽  
Manufacturing Companies ◽  
Structural Capital ◽  
Capital Efficiency ◽  
And Performance

<p class="Style1"><em>This study aims to ident6 and analyze the effect of intellectual capital as one of the company's intangible assets to market value and financial performance<sup>.</sup>of the company-manufacturing companies using the Value Added Intellectual Capital (VAIC <sup>m</sup>). The analysis method used is multiple panels because the structure of the data used in this research is the data panel. The results of the hypothesis theory shows that the intellectual capital has significant effect on the market value and performance of the company. The three components of intellectual capital, as the physical capital efficiency, human capital and structural capital efficiency, have a positive effect on firm value and performance of companies that dproksi by ROA, ATO, ROE and OI / S. So do the results of statistical tests, except for the efficiency of the human capital and structural capital efficiency ROE against Of / S. The results show that intellectual capital is a factor that is very important and significant effect on the quality of the company which in turn directly affects firm value andfinancial performance of the company.</em></p>

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.

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