IDEAS home Printed from https://ideas.repec.org/a/eee/ecofin/v48y2019icp419-433.html
   My bibliography  Save this article

Bank technical, allocative and cost efficiencies in Africa: The influence of intellectual capital

Author

Listed:
  • Adesina, Kolade Sunday

Abstract

This paper examines the effects of intellectual capital (IC) on technical, allocative and cost efficiencies for a panel of 339 commercial banks operating in 31 African countries over the 2005–2015 period. Our findings, which are based on Tobit and one-step system GMM regressions, provide evidence that IC exerts positive effects on bank technical, allocative and cost efficiencies. This finding, when significant, remains the same with the sample divided into various regional panels – East Africa, North Africa, Southern Africa, and West Africa. However, when our measure of IC is divided into its three components, namely human capital, physical capital and structural capital, only human capital is positively related to all the three efficiency measures across the panels. Our results suggest the need for African banks to place emphasis on human capital development.

Suggested Citation

  • Adesina, Kolade Sunday, 2019. "Bank technical, allocative and cost efficiencies in Africa: The influence of intellectual capital," The North American Journal of Economics and Finance, Elsevier, vol. 48(C), pages 419-433.
    • Handle: RePEc:eee:ecofin:v:48:y:2019:i:c:p:419-433
    DOI: 10.1016/j.najef.2019.03.009
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1062940818304170
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.najef.2019.03.009?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. 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.
    2. Chan, Sok-Gee & Koh, Eric H.Y. & Zainir, Fauzi & Yong, Chen-Chen, 2015. "Market structure, institutional framework and bank efficiency in ASEAN 5," Journal of Economics and Business, Elsevier, vol. 82(C), pages 84-112.
    3. Meles, Antonio & Porzio, Claudio & Sampagnaro, Gabriele & Verdoliva, Vincenzo, 2016. "The impact of the intellectual capital efficiency on commercial banks performance: Evidence from the US," Journal of Multinational Financial Management, Elsevier, vol. 36(C), pages 64-74.
    4. Nicholas Asare & Abdul Latif Alhassan & Michael Effah Asamoah & Matthew Ntow-Gyamfi, 2017. "Intellectual capital and profitability in an emerging insurance market," Journal of Economic and Administrative Sciences, Emerald Group Publishing Limited, vol. 33(1), pages 2-19, May.
    5. Chortareas, Georgios E. & Girardone, Claudia & Ventouri, Alexia, 2013. "Financial freedom and bank efficiency: Evidence from the European Union," Journal of Banking & Finance, Elsevier, vol. 37(4), pages 1223-1231.
    6. Barth, James R. & Lin, Chen & Ma, Yue & Seade, Jesús & Song, Frank M., 2013. "Do bank regulation, supervision and monitoring enhance or impede bank efficiency?," Journal of Banking & Finance, Elsevier, vol. 37(8), pages 2879-2892.
    7. Timothy J. Coelli & D.S. Prasada Rao & Christopher J. O’Donnell & George E. Battese, 2005. "An Introduction to Efficiency and Productivity Analysis," Springer Books, Springer, edition 0, number 978-0-387-25895-9, December.
    8. Allen N. Berger & Timothy H. Hannan, 1998. "The Efficiency Cost Of Market Power In The Banking Industry: A Test Of The "Quiet Life" And Related Hypotheses," The Review of Economics and Statistics, MIT Press, vol. 80(3), pages 454-465, August.
    9. Abdullah Yalama, 2013. "The relationship between intellectual capital and banking performance in Turkey: evidence from panel data," International Journal of Learning and Intellectual Capital, Inderscience Enterprises Ltd, vol. 10(1), pages 71-87.
    10. Aktham I. Maghyereh & Basel Awartani, 2014. "The effect of market structure, regulation, and risk on banks efficiency," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 41(3), pages 405-430, May.
    11. Elsas, Ralf & Hackethal, Andreas & Holzhäuser, Markus, 2010. "The anatomy of bank diversification," Journal of Banking & Finance, Elsevier, vol. 34(6), pages 1274-1287, June.
    12. H. Semih Yildirim & George Philippatos, 2007. "Efficiency of Banks: Recent Evidence from the Transition Economies of Europe, 1993-2000," The European Journal of Finance, Taylor & Francis Journals, vol. 13(2), pages 123-143.
    13. Baselga-Pascual, Laura & Trujillo-Ponce, Antonio & Cardone-Riportella, Clara, 2015. "Factors influencing bank risk in Europe: Evidence from the financial crisis," The North American Journal of Economics and Finance, Elsevier, vol. 34(C), pages 138-166.
    14. Shantanu Kumar Ghosh & Santi Gopal Maji, 2015. "Empirical Validity of Value Added Intellectual Coefficient Model in Indian Knowledge-based Sector," Global Business Review, International Management Institute, vol. 16(6), pages 947-962, December.
    15. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    16. Kamini Tandon & Harsh Purohit & Deepak Tandon, 2016. "Measuring Intellectual Capital and Its Impact on Financial Performance: Empirical Evidence from CNX Nifty Companies," Global Business Review, International Management Institute, vol. 17(4), pages 980-997, August.
    17. Tugba Eyceyurt Batir & David A. Volkman & Bener Gungor, 2017. "Determinants of bank efficiency in Turkey: Participation banks versus conventional banks," Borsa Istanbul Review, Research and Business Development Department, Borsa Istanbul, vol. 17(2), pages 86-96, June.
    18. Galina Besstremyannaya, 2013. "The impact of Japanese hospital financing reform on hospital efficiency: A difference-in-difference approach," The Japanese Economic Review, Japanese Economic Association, vol. 64(3), pages 337-362, September.
    19. Peng, Jin-Lung & Jeng, Vivian & Wang, Jennifer L. & Chen, Yen-Chih, 2017. "The impact of bancassurance on efficiency and profitability of banks: Evidence from the banking industry in Taiwan," Journal of Banking & Finance, Elsevier, vol. 80(C), pages 1-13.
    20. Shaban, Mohamed & James, Gregory A., 2018. "The effects of ownership change on bank performance and risk exposure: Evidence from indonesia," Journal of Banking & Finance, Elsevier, vol. 88(C), pages 483-497.
    21. Triki, Thouraya & Kouki, Imen & Dhaou, Mouna Ben & Calice, Pietro, 2017. "Bank regulation and efficiency: What works for Africa?," Research in International Business and Finance, Elsevier, vol. 39(PA), pages 183-205.
    22. Niamh Brennan, 2001. "Reporting intellectual capital in annual reports : evidence from Ireland," Open Access publications 10197/2918, Research Repository, University College Dublin.
    23. Chen, Fu-Chiang & Liu, Z.-John & Kweh, Qian Long, 2014. "Intellectual capital and productivity of Malaysian general insurers," Economic Modelling, Elsevier, vol. 36(C), pages 413-420.
    24. Vo, Duc, 2018. "Should Bankers Be Concerned with Intellectual Capital? A Study of the Thai Banking Sector," MPRA Paper 103275, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jian Xu & Muhammad Haris & Hongxing Yao, 2019. "Should Listed Banks Be Concerned with Intellectual Capital in Emerging Asian Markets? A Comparison between China and Pakistan," Sustainability, MDPI, vol. 11(23), pages 1-23, November.
    2. Md. Mominur Rahman & Bilkis Akhter, 2021. "The impact of investment in human capital on bank performance: evidence from Bangladesh," Future Business Journal, Springer, vol. 7(1), pages 1-13, December.
    3. Wei-han Liu & Qian Long Kweh, 2022. "Reexamining nonlinear effects of intellectual capital on firm efficiency," Annals of Operations Research, Springer, vol. 315(2), pages 1319-1344, August.
    4. Shamsuddin Ahamad & Hamdan Amer Ali Al-Jaifi & Kizito Uyi Ehigiamusoe, 2023. "Impact of Intellectual Capital on Microfinance Institutions’ Efficiency: the Moderating Role of External Governance," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(2), pages 691-717, June.
    5. Syed Zabid Hossain & Md. Sohel Rana, 2024. "Effects of Ownership Structure on Intellectual Capital: Evidence from Publicly Listed Banks in Bangladesh," JRFM, MDPI, vol. 17(6), pages 1-16, May.
    6. Dahui Zhou & Svetlana Danshina & Anastasia Kurilova & Marcin Lis, 2021. "The Impact of an Enterprise’s Intellectualization on Its Leadership Potential," Sustainability, MDPI, vol. 13(17), pages 1-19, August.
    7. Hongxing Yao & Muhammad Haris & Gulzara Tariq & Hafiz Mustansar Javaid & Muhammad Aamir Shafique Khan, 2019. "Intellectual Capital, Profitability, and Productivity: Evidence from Pakistani Financial Institutions," Sustainability, MDPI, vol. 11(14), pages 1-30, July.
    8. Adesina, Kolade Sunday, 2021. "How diversification affects bank performance: The role of human capital," Economic Modelling, Elsevier, vol. 94(C), pages 303-319.
    9. Madugba Joseph Ugochukwu & Egbide Ben-Caleb & Uzondu Anoruoh Paul & Oparah Vivian Iheaku & Adesola Deborah Ayomide, 2023. "Intellectual Capital Value Addition and the Efficient Assets Management of Listed Manufacturing Firms in Nigeria," Folia Oeconomica Stetinensia, Sciendo, vol. 23(2), pages 241-260, December.
    10. King Carl Tornam Duho, 2022. "Intangibles, Intellectual Capital, and the Performance of Listed Non-Financial Services Firms in West Africa: A Cross-Country Analysis," Merits, MDPI, vol. 2(3), pages 1-25, June.
    11. Monika Barak & Rakesh Kumar Sharma, 2024. "Does intellectual capital impact the financial performance of Indian public sector banks? An empirical analysis using GMM," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-11, December.
    12. Trung Duc Nguyen & Chi Huu Lu, 2024. "Does Intellectual Capital Foster Deposit Growth in Banking System? Empirical Evidence from a Developing Economy," Advances in Decision Sciences, Asia University, Taiwan, vol. 28(2), pages 93-115, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhenni Yang & Christopher Gan & Zhaohua Li, 2019. "Role of Bank Regulation on Bank Performance: Evidence from Asia-Pacific Commercial Banks," JRFM, MDPI, vol. 12(3), pages 1-25, August.
    2. Adesina, Kolade Sunday, 2021. "How diversification affects bank performance: The role of human capital," Economic Modelling, Elsevier, vol. 94(C), pages 303-319.
    3. Hongxing Yao & Muhammad Haris & Gulzara Tariq & Hafiz Mustansar Javaid & Muhammad Aamir Shafique Khan, 2019. "Intellectual Capital, Profitability, and Productivity: Evidence from Pakistani Financial Institutions," Sustainability, MDPI, vol. 11(14), pages 1-30, July.
    4. Cheng, Maoyong & Qu, Yang & Jiang, Chunxia & Zhao, Chenchen, 2022. "Is cloud computing the digital solution to the future of banking?," Journal of Financial Stability, Elsevier, vol. 63(C).
    5. Kozak Sylwester & Wierzbowska Agata, 2021. "Banking Market Concentration and Bank Efficiency. Evidence from Southern, Eastern and Central Europe," South East European Journal of Economics and Business, Sciendo, vol. 16(1), pages 38-52, June.
    6. Mai, Nhat Chi, 2015. "Efficiency of the banking system in Vietnam under financial liberalization," OSF Preprints qsf6d, Center for Open Science.
    7. Abreu, Emmanuel Sousa de & Kimura, Herbert & Sobreiro, Vinicius Amorim, 2019. "What is going on with studies on banking efficiency?," Research in International Business and Finance, Elsevier, vol. 47(C), pages 195-219.
    8. Vaneet Bhatia & Sankarshan Basu & Subrata Kumar Mitra & Pradyumna Dash, 2018. "A review of bank efficiency and productivity," OPSEARCH, Springer;Operational Research Society of India, vol. 55(3), pages 557-600, November.
    9. Worthington, Andrew C. & Zelenyuk, Valentin, 2018. "Data envelopment analysis, truncated regression and double-bootstrap for panel data with application to Chinese bankingAuthor-Name: Du, Kai," European Journal of Operational Research, Elsevier, vol. 265(2), pages 748-764.
    10. Psillaki, Maria & Mamatzakis, Emmanuel, 2017. "What drives bank performance in transitions economies? The impact of reforms and regulations," Research in International Business and Finance, Elsevier, vol. 39(PA), pages 578-594.
    11. Francisco Javier Sáez-Fernández & Andrés J. Picazo-Tadeo & Mercedes Beltrán-Esteve & Caroline Elliott, 2015. "Assessing the performance of the Latin American and Caribbean banking industry: Are domestic and foreign banks so different?," Cogent Economics & Finance, Taylor & Francis Journals, vol. 3(1), pages 1006976-100, December.
    12. Dat T. Nguyen & Tu D. Q. Le & Tin H. Ho, 2021. "Intellectual Capital and Bank Risk in Vietnam—A Quantile Regression Approach," JRFM, MDPI, vol. 14(1), pages 1-15, January.
    13. Chan, Sok-Gee & Koh, Eric H.Y. & Zainir, Fauzi & Yong, Chen-Chen, 2015. "Market structure, institutional framework and bank efficiency in ASEAN 5," Journal of Economics and Business, Elsevier, vol. 82(C), pages 84-112.
    14. Muhammad Haris & HongXing Yao & Gulzara Tariq & Ali Malik & Hafiz Mustansar Javaid, 2019. "Intellectual Capital Performance and Profitability of Banks: Evidence from Pakistan," JRFM, MDPI, vol. 12(2), pages 1-26, April.
    15. Girma Jirata Duguma & Jiqin Han, 2021. "Effect of deposit mobilization on the technical efficiency of rural saving and credit cooperatives: Evidence from Ethiopia," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 92(4), pages 621-647, December.
    16. Fukuyama, Hirofumi & Matousek, Roman & Tzeremes, Nickolaos G., 2020. "A Nerlovian cost inefficiency two-stage DEA model for modeling banks’ production process: Evidence from the Turkish banking system," Omega, Elsevier, vol. 95(C).
    17. David Adeabah & Charles Andoh, 2020. "Cost efficiency and welfare performance of banks: evidence from an emerging economy," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 16(5), pages 549-574, July.
    18. Cheng, Maoyong & Qu, Yang, 2023. "The false prosperity and promising future: Effects of data resources on bank efficiency," International Review of Financial Analysis, Elsevier, vol. 89(C).
    19. Jian Xu & Muhammad Haris & Hongxing Yao, 2019. "Should Listed Banks Be Concerned with Intellectual Capital in Emerging Asian Markets? A Comparison between China and Pakistan," Sustainability, MDPI, vol. 11(23), pages 1-23, November.
    20. Chortareas, Georgios E. & Girardone, Claudia & Ventouri, Alexia, 2012. "Bank supervision, regulation, and efficiency: Evidence from the European Union," Journal of Financial Stability, Elsevier, vol. 8(4), pages 292-302.

    More about this item

    Keywords

    Africa; Intellectual capital; Bank efficiency;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecofin:v:48:y:2019:i:c:p:419-433. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620163 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.