Cross-country comparison of intellectual capital performance and its impact on financial performance of commercial banks in GCC countries
Purpose – The purpose of this paper is to explore the intellectual capital (IC) performance of banks in Gulf Cooperation Council (GCC) countries and to empirically investigate if IC has an impact on financial performance as well as to identify the IC components that may be the drivers of the traditi...
| Autori principali: | , |
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| Natura: | Articolo |
| Lingua: | English |
| Pubblicazione: |
Emerald Group Publishing Limited
2016
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| Accesso online: | https://repo.uum.edu.my/id/eprint/27379/1/IJIMEFI%209%204%202016%20512%20531.pdf |
| _version_ | 1825805636179329024 |
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| author | Al-Musali, Mahfoudh Abdulkarem Ku Ismail, Ku Nor Izah |
| author_facet | Al-Musali, Mahfoudh Abdulkarem Ku Ismail, Ku Nor Izah |
| author_sort | Al-Musali, Mahfoudh Abdulkarem |
| collection | UUM |
| description | Purpose – The purpose of this paper is to explore the intellectual capital (IC) performance of banks in Gulf Cooperation Council (GCC) countries and to empirically investigate if IC has an impact on financial performance as well as to identify the IC components that may be the drivers of the traditional indicators of bank success.
Design/methodology/approach – The empirical data are drawn from banks’ annual reports over
the three-year period of 2008 to 2010. Ordinary least squares regression analysis is constructed to examine the relationships between IC and the banks’ financial performance indicators. Pulic’s
value-added intellectual coefficient method (VAIC) is applied to measure IC performance. Findings – Empirical findings, after controlling for bank size and global financial crisis, indicate that
IC is positively associated with bank financial performance indicators in all GCC countries. However, when VAIC is split into its three components, the relationships between these components and bank financial performance indicators are varied.Research limitations/implications – The main limitation of this study is the use of IC measurement model. Its basic advantage (simplicity and ease of use) is also its main limitation. The main problem is measuring the contribution of something which is not physical and cannot be easily quantified. The key issue is that the value created by IC is indirect. However, at present, no perfect
solution is available for intellectual capital measurement, as the area is still exploring the best possible solutions. Practical implications – The results may extend the understanding of the role of IC in banking sector in GCC region and may give inputs to managers of GCC banks to structure relevant strategies to obtain, utilize, develop and retain IC. The findings also could help policy makers in GCC to formulate and implement policies for establishing a resilient banking sector. Originality/value – This study adds to the literature by extending the knowledge of IC
performance and its utilization for increasing the financial performance of GCC banks. There has
only been one previous empirical study that explores the IC and its relationship with the traditional measures of bank performance in GCC region (only in Bahrain). It is the first comparative study across GCC countries. |
| first_indexed | 2024-07-04T06:35:30Z |
| format | Article |
| id | uum-27379 |
| institution | Universiti Utara Malaysia |
| language | English |
| last_indexed | 2024-07-04T06:35:30Z |
| publishDate | 2016 |
| publisher | Emerald Group Publishing Limited |
| record_format | eprints |
| spelling | uum-273792020-08-26T13:09:52Z https://repo.uum.edu.my/id/eprint/27379/ Cross-country comparison of intellectual capital performance and its impact on financial performance of commercial banks in GCC countries Al-Musali, Mahfoudh Abdulkarem Ku Ismail, Ku Nor Izah HG Finance Purpose – The purpose of this paper is to explore the intellectual capital (IC) performance of banks in Gulf Cooperation Council (GCC) countries and to empirically investigate if IC has an impact on financial performance as well as to identify the IC components that may be the drivers of the traditional indicators of bank success. Design/methodology/approach – The empirical data are drawn from banks’ annual reports over the three-year period of 2008 to 2010. Ordinary least squares regression analysis is constructed to examine the relationships between IC and the banks’ financial performance indicators. Pulic’s value-added intellectual coefficient method (VAIC) is applied to measure IC performance. Findings – Empirical findings, after controlling for bank size and global financial crisis, indicate that IC is positively associated with bank financial performance indicators in all GCC countries. However, when VAIC is split into its three components, the relationships between these components and bank financial performance indicators are varied.Research limitations/implications – The main limitation of this study is the use of IC measurement model. Its basic advantage (simplicity and ease of use) is also its main limitation. The main problem is measuring the contribution of something which is not physical and cannot be easily quantified. The key issue is that the value created by IC is indirect. However, at present, no perfect solution is available for intellectual capital measurement, as the area is still exploring the best possible solutions. Practical implications – The results may extend the understanding of the role of IC in banking sector in GCC region and may give inputs to managers of GCC banks to structure relevant strategies to obtain, utilize, develop and retain IC. The findings also could help policy makers in GCC to formulate and implement policies for establishing a resilient banking sector. Originality/value – This study adds to the literature by extending the knowledge of IC performance and its utilization for increasing the financial performance of GCC banks. There has only been one previous empirical study that explores the IC and its relationship with the traditional measures of bank performance in GCC region (only in Bahrain). It is the first comparative study across GCC countries. Emerald Group Publishing Limited 2016 Article PeerReviewed application/pdf en https://repo.uum.edu.my/id/eprint/27379/1/IJIMEFI%209%204%202016%20512%20531.pdf Al-Musali, Mahfoudh Abdulkarem and Ku Ismail, Ku Nor Izah (2016) Cross-country comparison of intellectual capital performance and its impact on financial performance of commercial banks in GCC countries. International Journal of Islamic and Middle Eastern Finance and Management, 9 (4). pp. 512-531. ISSN 1753-8394 http://doi.org/10.1108/IMEFM-03-2015-0029 doi:10.1108/IMEFM-03-2015-0029 doi:10.1108/IMEFM-03-2015-0029 |
| spellingShingle | HG Finance Al-Musali, Mahfoudh Abdulkarem Ku Ismail, Ku Nor Izah Cross-country comparison of intellectual capital performance and its impact on financial performance of commercial banks in GCC countries |
| title | Cross-country comparison of intellectual capital performance and its impact on financial performance of commercial banks in GCC countries |
| title_full | Cross-country comparison of intellectual capital performance and its impact on financial performance of commercial banks in GCC countries |
| title_fullStr | Cross-country comparison of intellectual capital performance and its impact on financial performance of commercial banks in GCC countries |
| title_full_unstemmed | Cross-country comparison of intellectual capital performance and its impact on financial performance of commercial banks in GCC countries |
| title_short | Cross-country comparison of intellectual capital performance and its impact on financial performance of commercial banks in GCC countries |
| title_sort | cross country comparison of intellectual capital performance and its impact on financial performance of commercial banks in gcc countries |
| topic | HG Finance |
| url | https://repo.uum.edu.my/id/eprint/27379/1/IJIMEFI%209%204%202016%20512%20531.pdf |
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