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Intellectual Capital Disclosure and Financial Performance Nexus in Islamic and Conventional Banks in the GCC Countries

Akkas, E.; Asutay, M.

Intellectual Capital Disclosure and Financial Performance Nexus in Islamic and Conventional Banks in the GCC Countries Thumbnail


Erhan Akkas
PGR Student Doctor of Philosophy


Purpose: This paper aims to comparatively examine the impact of the intellectual capital performance on the financial performance of Islamic and conventional banks in the GCC countries by classifying intellectual capital as human capital, knowledge creation, and innovation processes. Design/methodology/approach: Along with the theoretical discussion in essentialising the rationale for intellectual capital formation through Islamic norms, the empirical analysis is formulated through the data generated by disclosure analysis using a panel of five GCC countries examining 408 annual reports from 19 Islamic and 23 conventional banks covering 2010-2019 period. In the analysis of the generated data, both fixed and random effects regression models are utilised. Findings: The findings suggest that Islamic banks perform better than conventional banks in creating intellectual capital through knowledge creation, human capital, intellectual contribution. While the intellectual capital disclosure index and its pillars are significant for Islamic banks, these variables are not significant for the conventional banks in the GCC countries. Research Limitations/implications: Considering that disclosed information may not reflect actual experience and performance, factual data could also be utilised to overcome potential shortcomings of disclosure generated data. Practical Implications: This paper demonstrates that Islamic banks in the GCC have been successful in their intellectual capital performance, whereby they seem to be performing in line with the Islamic ontology. In addition, the disclosure items utilised in this study may guide the Islamic and conventional banks in the process of preparing their annual reports. Importantly, they may use these items as benchmarks in further developing their intellectual capital performance for better financial performance. Originality/Value: This paper essentialises knowledge development and innovation for Islamic banks through the Islamic cognitive system rather than as a requirement of the market mechanism. Secondly, a comparative analysis between Islamic and conventional banks is presented by acknowledging the peculiarities of Islamic banks in the methodology and disclosure index.

Journal Article Type Article
Acceptance Date Dec 21, 2021
Online Publication Date Jan 24, 2022
Publication Date Sep 20, 2022
Deposit Date Jan 4, 2022
Publicly Available Date Jan 5, 2022
Journal International Journal of Islamic and Middle Eastern Finance and Management
Print ISSN 1753-8394
Publisher Emerald
Peer Reviewed Peer Reviewed
Volume 15
Issue 5
Pages 943-966
Public URL


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Copyright Statement
This article is made available under a Creative Commons Attribution Non-commercial International Licence 4.0 (CC BY-NC 4.0) and any reuse must be in accordance with the terms outlined by the licence.

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