Journal Article•
The Impact of Intellectual Capital on The Performance of Islamic Banking
TL;DR: In this article, the authors consolidate these findings and investigate three elements of intellectual capital including human capital, structural capital, and customer capital and their internal relations in the Islamic banking industry.
Abstract: Intellectual capital becomes the integral part in the development of successful organization lately. Most of the organizations and banks in Islamic countries and Iran are started to shift in practicing intellectual capital since knowing the important of it. Intellectual capital is defined as intangible assets that include technology, customer information, brand name, reputation and corporate culture that are invaluable to a firm‟s competitive power. In a contemporary business environment, intellectual capital is considered as the most critical strategic asset for the success of the organization. Intellectual capital is a life blood of the high -tech and knowledge intensive organizations. Banking sector is considered as a knowledge intensive segment. Therefore, there is a great need to nourish the concept and applications of intellectual capital in banking sector. In Islamic countries, banking sector is mainly based on conventional banking sector and Islamic banking sector. The purpose of this research is to consolidate these findings and investigate three elements of intellectual capital including human capital, structural capital and customer capital and their internal relations in the Islamic banking industry.
Citations
More filters
TL;DR: In this paper, the authors report on the results of a study carried out to establish the contribution of board of directors effectiveness, intellectual capital (IC) and managerial attitude to the adoption of International Financial Reporting Standards (IFRSs) in micro-finance institutions (MFIs).
Abstract: The purpose of this paper is to report on the results of a study carried out to establish the contribution of board of directors’ effectiveness, intellectual capital (IC) and managerial attitude to the adoption of International Financial Reporting Standards (IFRSs) in microfinance institutions (MFIs).,This study is cross-sectional and correlational. Data were collected through a questionnaire survey of 67 MFIs that are members of the Association of Microfinance Institutions of Uganda. The data were analyzed using statistical package for social sciences.,Both board of director’s effectiveness and IC positively and significantly contribute to the adoption of IFRSs. Managerial attitude is positively and significantly associated with the adoption of IFRSs, but its explanatory power is subsumed in IC.,To the authors’ knowledge, this is the first study to investigate the contribution of board of director’s effectiveness, IC and managerial attitude to the adoption of IFRSs in MFIs using evidence from a developing African country like Uganda.
18 citations
TL;DR: In this article, the influence of the intellectual capital of SMEs on innovation and organizational performance in the context of an emerging country was analyzed by partial least squares-structural equation modeling (PLS-SEM).
Abstract: The objective of this study is to analyze the influence of the intellectual capital of SMEs on innovation and organizational performance in the context of an emerging country,The sample consisted of 259 industrial SMEs from the Cordoba, Argentina The data were analyzed by partial least squares–structural equation modeling (PLS–SEM),The study provides empirical evidence that the three components of intellectual capital generate positive and significant effects on innovation in processes and products Structural capital is the component that has the greatest effect on innovation It also showed a positive and significant relationship between innovation in processes and performance, contributing to the scarce empirical literature in the context of SMEs,The research exposes limitations that uncover a path for future First, the work uses as the only source of information, the consultation at the highest level of the company Second, the study covered only industrial companies Future studies should focus on other sectors and countries,The results may have important practical implications for SME owners and managers and offer a vision of the influence of intellectual capital on the innovative capacity of the organization,The value of work lies in establishing the importance of intellectual capital in the environment of an emerging country such as Argentina, given the low level of knowledge that exists in this area
13 citations
19 Aug 2019
TL;DR: In this paper, the authors examined the interactive effects of professionalism in the relationship between intellectual capital (IC) and performance of small and medium audit practices (SMPs) within the context of a developing economy, Uganda.
Abstract: The purpose of this paper is to examine the interactive effects of professionalism in the relationship between intellectual capital (IC) and performance of small and medium audit practices (SMPs) within the context of a developing economy, Uganda.,Data were collected through a questionnaire survey of 77 SMPs registered with the Institute of Certified Public Accountants of Uganda through their managing partners. The authors utilized multiple regression analysis to test hypotheses using centered variables and an interaction term between IC and professionalism.,IC is a significant determinant of performance of SMPs in Uganda; while professionalism when acting alone is not significant, however, results have shown that professionalism interacts with IC to enhance performance of SMPs.,This study, owing to the absence of publically available published financial statements of SMPs, utilizes a questionnaire to collect data on performance of SMPs which could be less objective. Further, as the study is limited to SMPs in Uganda, it is possible that the results are only applicable to Uganda’s accountancy field. In addition, the use of multiple regression is prone to problems associated with sampling error. However, the likelihood of these problems is mitigated by the interface with data and regression analysis diagnostics that were carried out.,This study provides initial empirical evidence on the relationship between IC, professionalism and performance of SMPs in developing economies. The study further indicates that while IC acts independently to influence firm performance, its interaction with professionalism enhances this performance.
12 citations
Dissertation•
01 Jan 2012
11 citations
TL;DR: In this article , the impact of the intellectual capital performance on the financial performance of Islamic and conventional banks in the Gulf Cooperation Council (GCC) countries by classifying intellectual capital as human capital, knowledge creation and innovation processes is examined.
Abstract:
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 Gulf Cooperation Council (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 used.
Findings
The findings of this paper suggest that Islamic banks perform better than conventional banks in creating intellectual capital through knowledge creation, human capital and 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 used 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 used in this paper 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.
8 citations
References
More filters
TL;DR: In this paper, the authors investigate the three elements of intellectual capital, i.e., human capital, structural capital, and customer capital and their inter-relationships within two industry sectors in Malaysia.
Abstract: The purpose of this empirical study is to investigate the three elements of intellectual capital, i.e. human capital, structural capital, and customer capital, and their inter‐relationships within two industry sectors in Malaysia. The study was conducted using a psychometrically validated questionnaire which was originally administered in Canada. The main conclusions from this particular study are that: human capital is important regardless of industry type; human capital has a greater influence on how a business should be structured in non‐service industries compared to service industries; customer capital has a significant influence over structural capital irrespective of industry; and finally, the development of structural capital has a positive relationship with business performance regardless of industry. The final specified models in this study show a robust explanation of business performance variance within the Malaysian context which bodes well for future research in alternative contexts.
1,753 citations
TL;DR: In this article, the authors measured the intellectual capital performance of commercial banks in Malaysia for the period 2001 to 2003, using efficiency coefficient called VAIC™ developed by Ante Pulic.
Abstract: Purpose – This paper measured the intellectual capital performance of commercial banks in Malaysia for the period 2001 to 2003, using efficiency coefficient called VAIC™ developed by Ante Pulic.Design/methodology/approach – Data required to calculate human capital, structural capital and capital employed efficiencies were obtained from annual reports.Findings – As a whole, all banks have relatively higher human capital efficiency than structural and capital efficiencies. Domestic banks were generally less efficient compared to foreign banks. Hong Leong Bank, Public Bank and Southern Bank were the top three efficient domestic banks based on VAICTM assessment, while Scotia Bank is the most efficient foreign bank. Public Bank and EON Bank have consistently showed improvement in efficiency in the three years. There were significant differences between rankings of bank according to efficiency and traditional accounting measures. In view of the findings that seven out of ten domestic banks did not show improvem...
464 citations
TL;DR: Examination of the inter-relationships and interactions among intellectual capital components and business performance in the Portuguese banking industry and the concept of relational capital was extended to include 'stakeholder orientation' items.
Abstract: Previous empirical studies confirm that intellectual capital has a significant and substantive impact on performance. The purpose of this research is to examine the inter-relationships and interactions among intellectual capital components and business performance in the Portuguese banking industry. The concept of relational capital was extended to include 'stakeholder orientation' items. Model development and hypothesis testing was conducted using PLS on a sample of 253 respondents from 53 organisations. Results show a confirmation of previous studies as it relates to hypothesis testing but a difference in psychometric item evaluation given the unique geographical and sectoral context. Recommendations are then made for researchers and practitioners.
437 citations
TL;DR: In this article, the authors used the Value Added Intellectual Coefficient (VAIC) for measuring the value-based performance of the Indian banking sector for a period of five years from 2000 to 2004.
Abstract: Purpose – The paper seeks to estimate and analyze the Value Added Intellectual Coefficient (VAIC™) for measuring the value‐based performance of the Indian banking sector for a period of five years from 2000 to 2004.Design/methodology/approach – Annual reports, especially the profit/loss account and balance‐sheet of the banks concerned for the relevant years, were used to obtain the data. A review is conducted of the international literature on intellectual capital with specific reference to literature that reviews measurement techniques and tools, and the VAIC™ method is applied in order to analyze the data of Indian banks for the five‐year period. The intellectual or human capital (HC) and physical capital (CA) of the Indian banking sector is analysed and their impact on the banks' value‐based performance is discussed.Findings – The study confirms the existence of vast differences in the performance of Indian banks in different segments, and there is also an improvement in the overall performance over th...
337 citations
TL;DR: In this article, the authors apply the VAICTM method to analyze the data of Japanese banks for the financial period 1 April 2000 − 31 March 2001, and discuss their impact on the banks' value-based performance.
Abstract: The performance of economic entities has been a research matter even in the ancient world. The human “genius” has been recognized as a vehicle for certain valuable capabilities and as the critical enabler of transforming processes. But it has not been considered as an intellectual capitalizator or intellectual asset. This has happened recently in the promising field of intellectual capital and its related philosophy of knowledge management, although the related research status quo is still in its infancy. Applies the VAICTM method in order to analyze the data of Japanese banks for the financial period 1 April 2000‐31 March 2001. Analyzes the intellectual or human (HC) and physical capital (CA) of the Japanese banking sector and discusses their impact on the banks’ value‐based performance. Focuses on the actual status of HC and CA capital and its predictive, discriminative and integrative impact on the “intellectual” added value‐based performance situation. Confirms the existence of significant performance...
323 citations
"The Impact of Intellectual Capital ..." refers background in this paper
...He also indicated a significant difference among banks different groups (Mavridis, 2004)....
[...]