IDEAS home Printed from https://ideas.repec.org/a/gam/jjrfmx/v14y2021i1p27-d476118.html
   My bibliography  Save this article

Intellectual Capital and Bank Risk in Vietnam—A Quantile Regression Approach

Author

Listed:
  • Dat T. Nguyen

    (School of Banking & Finance, University of Economics and Law, Ho Chi Minh City 700000, Vietnam
    Vietnam National University, Ho Chi Minh City 700000, Vietnam)

  • Tu D. Q. Le

    (Vietnam National University, Ho Chi Minh City 700000, Vietnam
    Institute for Development & Research in Banking Technology, University of Economics and Law, Ho Chi Minh City 700000, Vietnam)

  • Tin H. Ho

    (Vietnam National University, Ho Chi Minh City 700000, Vietnam
    Institute for Development & Research in Banking Technology, University of Economics and Law, Ho Chi Minh City 700000, Vietnam)

Abstract

This study empirically presents evidence of nonlinearity and heterogeneity relation between intellectual capital and risk-taking for the Vietnamese banking system. We used quantile regression methods on a data set of 30 Vietnamese banks from 2007 to 2019. The results showed that bank insolvency was positively affected by its value-added intellectual coefficient (VAIC) at the upper quantiles (i.e., 80th and 90th), while the opposite was true for credit risk (i.e., 10th and 20th quantiles). When observing the VAIC’s components, risk-taking behaviors were also significantly affected by HCE (Human Capital Efficiency), CEE (Capital Employed Efficiency) and SCE (Structural Capital Efficiency) at the 90th quantile of instability distribution and the 10th quantile of credit risk distribution. Furthermore, the results also emphasized that there was an inverse U-shaped association between intellectual capital and bank risk-taking. Therefore, this study provides important implications for policymakers, regulators, bank managers and academics that encourage increasing investment in knowledge assets to minimize bank risks in the long run.

Suggested Citation

  • 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.
  • Handle: RePEc:gam:jjrfmx:v:14:y:2021:i:1:p:27-:d:476118
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1911-8074/14/1/27/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/1911-8074/14/1/27/
    Download Restriction: no
    ---><---

    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. Saibal Ghosh, 2010. "Credit Growth, Bank Soundness and Financial Fragility," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 11(1), pages 69-98, March.
    3. Ivan A. Canay, 2011. "A simple approach to quantile regression for panel data," Econometrics Journal, Royal Economic Society, vol. 14(3), pages 368-386, October.
    4. Jiang, Hai & Zhang, Jinyi & Sun, Chen, 2020. "How does capital buffer affect bank risk-taking? New evidence from China using quantile regression," China Economic Review, Elsevier, vol. 60(C).
    5. Muhammad Khalique, T. Ramayah, Muhammad Tahir Ali Shah, Zafar Iqbal, 2019. "Intellectual Capital and Financial Performance of Banks in Sialkot Pakistan," Journal of Management Sciences, Geist Science, Iqra University, Faculty of Business Administration, vol. 6(1), pages 50-61, March.
    6. 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.
    7. Ghosh, Saibal, 2010. "Credit Growth, Bank Soundness and Financial Fragility: Evidence from Indian Banking Sector," MPRA Paper 24715, University Library of Munich, Germany.
    8. Mike Tayles & Richard H. Pike & Saudah Sofian, 2007. "Intellectual capital, management accounting practices and corporate performance," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 20(4), pages 522-548, July.
    9. 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.
    10. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    11. 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.
    12. Joseph Mensah Onumah & King Carl Tornam Duho, 2019. "Intellectual Capital: Its Impact on Financial Performance and Financial Stability of Ghanaian Banks," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 5(3), pages 243-268, July.
    13. Saona, Paolo, 2016. "Intra- and extra-bank determinants of Latin American Banks' profitability," International Review of Economics & Finance, Elsevier, vol. 45(C), pages 197-214.
    14. Ashraf, Badar Nadeem & Zheng, Changjun & Arshad, Sidra, 2016. "Effects of national culture on bank risk-taking behavior," Research in International Business and Finance, Elsevier, vol. 37(C), pages 309-326.
    15. Tu DQ Le & Van TH Nguyen & Son H Tran & David McMillan, 2020. "Geographic loan diversification and bank risk: A cross-country analysis," Cogent Economics & Finance, Taylor & Francis Journals, vol. 8(1), pages 1809120-180, January.
    16. Tu DQ. Le & Thanh Ngo, 2020. "The determinants of bank profitability : A cross-country analysis," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 20(2), pages 65-73.
    17. King Carl Tornam Duho, 2020. "Intellectual capital and technical efficiency of banks in an emerging market: a slack-based measure," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 47(7), pages 1711-1732, May.
    18. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, vol. 46(1), pages 33-50, January.
    19. Mirzaei, Ali & Moore, Tomoe & Liu, Guy, 2013. "Does market structure matter on banks’ profitability and stability? Emerging vs. advanced economies," Journal of Banking & Finance, Elsevier, vol. 37(8), pages 2920-2937.
    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. Faiza Omer Elmahgop, 2024. "Intellectual Capital and Bank Stability in Saudi Arabia: Navigating the Dynamics in a Transforming Economy," Sustainability, MDPI, vol. 16(10), pages 1-23, May.
    2. Md Mohiuddin Chowdhury & Changjun Zheng & Anupam Das Gupta & Atta Ullah, 2024. "Competition's Effect: Unveiling the Simultaneous Relationship between Risk and Cost of Financial Intermediation," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 14(5), pages 1-4.
    3. Pejman Peykani & Mostafa Sargolzaei & Mohammad Hashem Botshekan & Camelia Oprean-Stan & Amir Takaloo, 2023. "Optimization of Asset and Liability Management of Banks with Minimum Possible Changes," Mathematics, MDPI, vol. 11(12), pages 1-24, June.
    4. Md. Sohel Rana & Syed Zabid Hossain, 2023. "Intellectual Capital, Firm Performance, and Sustainable Growth: A Study on DSE-Listed Nonfinancial Companies in Bangladesh," Sustainability, MDPI, vol. 15(9), pages 1-23, April.

    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. 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.
    2. Muhammad Haris & Hongxing Yao & Gulzara Tariq & Hafiz Mustansar Javaid & Qurat Ul Ain, 2019. "Corporate Governance, Political Connections, and Bank Performance," IJFS, MDPI, vol. 7(4), pages 1-37, October.
    3. 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.
    4. Tu D. Q. Le & Dat T. Nguyen, 2020. "Capital Structure and Bank Profitability in Vietnam: A Quantile Regression Approach," JRFM, MDPI, vol. 13(8), pages 1-17, August.
    5. Shabir, Mohsin & Jiang, Ping & Bakhsh, Satar & Zhao, Zhongxiu, 2021. "Economic policy uncertainty and bank stability: Threshold effect of institutional quality and competition," Pacific-Basin Finance Journal, Elsevier, vol. 68(C).
    6. Rakshit, Bijoy & Bardhan, Samaresh, 2023. "Does bank competition affect the transmission mechanism of monetary policy through bank lending channel? Evidence from India," Journal of Asian Economics, Elsevier, vol. 86(C).
    7. 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.
    8. Muhammad Haris & Yong Tan & Ali Malik & Qurat Ul Ain, 2020. "A Study on the Impact of Capitalization on the Profitability of Banks in Emerging Markets: A Case of Pakistan," JRFM, MDPI, vol. 13(9), pages 1-21, September.
    9. Atta Ullah & Chen Pinglu & Saif Ullah & Ningyu Qian & Mubasher Zaman, 2023. "Impact of intellectual capital efficiency on financial stability in banks: Insights from an emerging economy," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 1858-1871, April.
    10. Thich Nguyen & Chi Huu Lu, 2024. "Financial intermediation in banks and the key role of intellectual capital: new analysis from an emerging market," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(2), pages 508-522, June.
    11. Monika Barak & Rakesh Kumar Sharma, 2023. "Investigating the Impact of Intellectual Capital on the Sustainable Financial Performance of Private Sector Banks in India," Sustainability, MDPI, vol. 15(2), pages 1-21, January.
    12. Mudeer A. Khattak & Buerhan Saiti & Shabeer Khan, 2023. "Does market power explain margins in dual banking? Evidence from panel quantile regression," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 1826-1844, April.
    13. Moscelli, Giuseppe & Sayli, Melisa & Mello, Marco, 2022. "Staff Engagement, Job Complementarity and Labour Supply: Evidence from the English NHS Hospital Workforce," IZA Discussion Papers 15126, Institute of Labor Economics (IZA).
    14. Sarah Athirah Saruchi & Nor Aiza Mohd Zamil & Rohaida Basiruddin & Nor Faezah Ghazi Ahmad, 2019. "Examining the Impact of Corporate Governance on Intellectual Capital: Empirical Evidence of Islamic Banks," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 9(3), pages 104-117, July.
    15. Mostafa A. Ali & Nazimah Hussin & Hossam Haddad & Reem Al-Araj & Ibtihal A. Abed, 2021. "Intellectual Capital and Innovation Performance: Systematic Literature Review," Risks, MDPI, vol. 9(9), pages 1-19, September.
    16. Ben-Salha Ousama & Zmami Mourad, 2020. "The impact of private capital flows on economic growth in the MENA region," Economics and Business Review, Sciendo, vol. 6(3), pages 45-67, August.
    17. Galina Besstremyannaya, 2014. "The adverse effects of value-based purchasing in health care: dynamic quantile regression with endogeneity," Discussion Papers 14-006, Stanford Institute for Economic Policy Research.
    18. 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.
    19. 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.
    20. Flavio Calvino, 2016. "Technological Innovation and the Distribution of Employment Growth: a firm-level analysis," LEM Papers Series 2016/37, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.

    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:gam:jjrfmx:v:14:y:2021:i:1:p:27-:d:476118. 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.