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Examining the Impact of Intellectual Capital Performance on Financial Performance in Islamic Banks

Asutay, Mehmet; Ubaidillah

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Authors

Ubaidillah



Abstract

This study explores the intellectual capital (IC) performance of Islamic banks (IBs) and examines the impact of intellectual capital on financial performance in terms of profitability and productivity in IBs. The IC features are also examined individually to identify the primary driver of IC performance and their individual impact on the IBs’ financial performance. A quantitative method using multi regression analysis is utilised to examine the nexus between IC and the IBs’ financial performance indicators. The measurement of IC uses Modified Value-Added Intellectual Coefficient (MVAIC™) which is an extended model of VAIC™. The data were drawn from 49 IBs from 2014 to 2018. The empirical findings indicate that IC is positively significant in impacting IBs’ financial performance measures, especially profitability, but inconclusively related to productivity. Furthermore, when the components were analysed separately, the nexus between these components and IBs’ financial performance indicators show lesser uniform results. Capital employed efficiency and human capital efficiency are found to be the most influential features of IC in this study, while structural capital efficiency does not show an impact on financial performance. Evidence also demonstrates that all IC components are not significantly related to IBs’ productivity indicator.

Citation

Asutay, M., & Ubaidillah. (2024). Examining the Impact of Intellectual Capital Performance on Financial Performance in Islamic Banks. Journal of the Knowledge Economy, 15(1), 1231-1263. https://doi.org/10.1007/s13132-023-01114-1

Journal Article Type Article
Acceptance Date Jan 8, 2023
Online Publication Date Feb 17, 2023
Publication Date 2024-09
Deposit Date Jan 12, 2023
Publicly Available Date Feb 24, 2023
Journal Journal of the Knowledge Economy
Print ISSN 1868-7865
Electronic ISSN 1868-7873
Publisher Springer
Peer Reviewed Peer Reviewed
Volume 15
Issue 1
Pages 1231-1263
DOI https://doi.org/10.1007/s13132-023-01114-1
Public URL https://durham-repository.worktribe.com/output/1185428

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http://creativecommons.org/licenses/by/4.0/

Copyright Statement
This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.





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