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The contribution of intellectual capital to banks' competitive and financial performance: The evidence from Poland

Author

Listed:
  • Monika Klimontowicz

    (Ph.D. Hab., Department of Banking and Financial Markets, Faculty of Finance, University of Economics in Katowice, ul. 1 Maja 50, 40-287 Katowice, Poland)

  • Justyna Majewska

    (Ph.D., Department of Demography and Economic Statistics, Faculty of Informatics and Communication, University of Economics in Katowice, ul. 1 Maja 50, 40-287 Katowice, Poland)

Abstract

PURPOSE: The paper aims to investigate the contribution of intellectual capital to banks' competitive and financial performance. METHODOLOGY: The paper uses data retrieved from a research survey. The questionnaire on IC contribution to banks' competitive performance was applied to executive managers of retail banks operating in the Polish banking market. The data collected for the assessment of financial performance were retrieved from banks' annual reports and referred to each year from 2012 to 2019. The data were analyzed by Principal Axis Factor Analysis (PAF) and Partial Least Squares Structural Equation Modelling (PLS-SEM). FINDINGS: The results revealed that banks' competitive and financial performance depends on both the intellectual capital and environmental factors. The relation between financial performance and intellectual capital is positively mediated by competitive performance, and environmental factors can affect the strength of this relationship. The findings show that applying the resource-based theory might not be sufficient to gain a competitive advantage and sustainable market position in the case of banks. IMPLICATIONS: The results develop IC knowledge and prove the necessity to conduct systematic research on their importance for creating value for customers and gaining competitive advantage. They also provide direction for banks' decision-makers concerning factors that should be taken into account to create competitive advantage, market performance, and efficiency. The Polish banking market has transformed from undeveloped and non-competitive into a developed and competitive one during the last few decades. Thus, the results also have implications for other companies operating in transition markets as their competitiveness depends on understanding which factors should be the foundation for their market strategy and their competitiveness and efficiency to become a developed one. ORIGINALITY AND VALUE: The majority of the IC research concentrate on developed countries, and very little is known about developing and transition countries that were successful on their journey. Most of the research has focused on identifying and measuring IC components and the relationship between them. Usually, the research presents the state of the art and it is based on financial reports. However, the extent to which IC impacts competitive and financial performance in banking markets has been relatively rare. To the authors' best knowledge, this is the first study to examine empirically the relationship between intellectual capital, environment, competitive performance, and efficiency in a transformed banking market in Europe, which analyses the IC contribution over a few years' perspectives.

Suggested Citation

  • Monika Klimontowicz & Justyna Majewska, 2022. "The contribution of intellectual capital to banks' competitive and financial performance: The evidence from Poland," Journal of Entrepreneurship, Management and Innovation, Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione", vol. 18(2), pages 105-136.
  • Handle: RePEc:aae:journl:v:18:y:2022:i:2:p:105-136
    DOI: 10.7341/20221824
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    References listed on IDEAS

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    1. Sampath Kehelwalatenna & Gamini Premaratne, 2014. "Intellectual capital performance and its long-run behavior: The US banking industry case," New Zealand Economic Papers, Taylor & Francis Journals, vol. 48(3), pages 313-333, December.
    2. John Holland, 2010. "Banks, knowledge and crisis: a case of knowledge and learning failure," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 18(2), pages 87-105, May.
    3. Kuang-Hsun Shih, 2008. "Is e-banking a competitive weapon? A causal analysis," International Journal of Electronic Finance, Inderscience Enterprises Ltd, vol. 2(2), pages 180-196.
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    1. Aleksandra Kuzior & Olena Arefieva & Alona Kovalchuk & Paulina Brożek & Volodymyr Tytykalo, 2022. "Strategic Guidelines for the Intellectualization of Human Capital in the Context of Innovative Transformation," Sustainability, MDPI, vol. 14(19), pages 1-17, September.

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