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Intellectual capital and financial performance: A study of the Turkish Banking Sector

Author

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  • Nasif Ozkan
  • Sinan Cakan
  • Murad Kayacan

Abstract

The purpose of this study is to analyze the relationship between the intellectual capital performance and financial performance of 44 banks operating in Turkey between 2005 and 2014. The intellectual capital performance of banks is measured through the value added intellectual coefficient (VAIC) methodology. The intellectual capital performance of the Turkish banking sector is generally affected by human capital efficiency (HCE). In terms of bank types, development and investment banks have the highest average VAIC. When VAIC is divided into its components, it can be observed that capital employed efficiency (CEE) and human capital efficiency (HCE) positively affect the financial performance of banks. However, CEE has more influence on the financial performance of banks compared to HCE. Therefore, banks operating in the Turkish banking sector should use their financial and physical capitals if they wish to reach a higher profitability level.

Suggested Citation

  • Nasif Ozkan & Sinan Cakan & Murad Kayacan, 2017. "Intellectual capital and financial performance: A study of the Turkish Banking Sector," Borsa Istanbul Review, Research and Business Development Department, Borsa Istanbul, vol. 17(3), pages 190-198, September.
    • Handle: RePEc:bor:bistre:v:17:y:2017:i:3:p:190-198
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    More about this item

    Keywords

    Intellectual capital; Value added intellectual coefficient (VAIC); Financial performance; Return on asset; Turkish banking sector;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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