Does intellectual capital affect bank performance? Evidence from Bangladesh

• Published in: LBS journal of management & research Vol. 21; no. 2; pp. 171 - 185
• Main Authors: Majumder, Md. Tofael Hossain, Ruma, Israt Jahan, Akter, Aklima
• Format: Journal Article
• Language: English
• Published: New Delhi Emerald Group Publishing Limited 03.11.2023; Emerald Publishing
• Subjects: Banking industry; Banks; Commercial banks; Competition; Competitive advantage; Developing countries; Dynamic panel model; Economic crisis; Efficiency; Human capital; Hypotheses; Intangible assets; Intellectual capital; Intellectual property; International finance; Knowledge management; LDCs; Learning; Performance management; R&D; Research & development; Research methodology; SGMM; VAIC; Bangladesh; India
• ISSN: 0972-8031; 0974-1852
• DOI: 10.1108/LBSJMR-05-2022-0016

PurposeThis paper attempts to evaluate the impact of intellectual capital on bank performance in Bangladesh.Design/methodology/approachThe authors analyze an unbalanced longitudinal data of 32 banks, which cover 318 observations of bank-year from 2010 to 2019. The study employs a dynamic panel model with the two-step system generalized methods of moments (SGMM).FindingsThe results show that bank performance is significantly positively affected by the intellectual capital (IC) in Bangladesh. In addition, the findings show that capital employed efficiency (CEE) is an essential determinant of bank performance rather than structural capital efficiency (SCE) and human capital efficiency (HCE) for the Bangladeshi banking sector.Originality/valueThis work is unique as no one has explored the impact of intellectual capital on Bangladesh's bank performance. The findings suggest that business owners, managers and policymakers who want to improve the efficiency of their organizations should spend continuously on IC and expand their investment into CEE, which includes both financial and physical resources, in order to obtain better bank performance.