IDEAS home Printed from https://ideas.repec.org/a/ids/ijbire/v35y2024i3p429-456.html
   My bibliography  Save this article

Intellectual capital and its effect on the financial performance of Ethiopian private commercial banks

Author

Listed:
  • Abdu Mohammed Assfaw

Abstract

This study aims to examine the intellectual capital and its effect on the financial performance of Ethiopian private commercial banks using the pulic model. Quantitative panel data from audited annual reports of Ethiopian private commercial banks from 2011 to 2019 are collected. The robust fixed effect regression model has been adopted to investigate the effect of IC and the financial performance measures of the banks. The study results show a positive relationship between the value added intellectual coefficient (VAIC) and the financial performance of private commercial banks in Ethiopia. The study also revealed that the components of VAIC (i.e., human capital efficiency, capital employed efficiency, and structural capital efficiency) have a positive and significant effect on the financial performance of banks measured by return on asset and return on equity over the study periods. Practically, the results of the study could be useful for shareholders to consider IC as a strategic resource and hence emphasise these intangibles, and to the bank managers to benchmark themselves against the best competitors based on the level of efficiency rankings.

Suggested Citation

  • Abdu Mohammed Assfaw, 2024. "Intellectual capital and its effect on the financial performance of Ethiopian private commercial banks," International Journal of Business Innovation and Research, Inderscience Enterprises Ltd, vol. 35(3), pages 429-456.
    • Handle: RePEc:ids:ijbire:v:35:y:2024:i:3:p:429-456
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=142309
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

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

    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:ids:ijbire:v:35:y:2024:i:3:p:429-456. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=203 .

    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.