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Intellectual capital and financial performance of Islamic banks

Author

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  • A.A. Ousama
  • A.H. Fatima

Abstract

This paper measures the value added intellectual coefficient (VAIC™) for corporate efficiency performance of the Islamic banking sector in Malaysia. In addition, the paper examines the relationship between IC efficiency and financial performance. The paper used secondary data which was collected from the annual reports for the years 2008, 2009 and 2010. The paper found that the overall IC efficiency (i.e., VAIC) of this study's sample is higher than that of conventional banks' of prior studies. In addition, the paper found that human capital efficiency is higher than the structural capital and capital employed efficiencies. Furthermore, the paper found that IC efficiency influences the profitability of Islamic banks. The findings provide empirical evidence that the optimal utilisation of IC and resources leads to higher bank profitability. Therefore, these findings could be useful as Islamic banks that would like to further improve their financial performance could focus on improving their IC.

Suggested Citation

  • A.A. Ousama & A.H. Fatima, 2015. "Intellectual capital and financial performance of Islamic banks," International Journal of Learning and Intellectual Capital, Inderscience Enterprises Ltd, vol. 12(1), pages 1-15.
    • Handle: RePEc:ids:ijlica:v:12:y:2015:i:1:p:1-15
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    Citations

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    Cited by:

    1. Nguyet Thi Nguyen, 2023. "The Impact of Intellectual Capital on Service Firm Financial Performance in Emerging Countries: The Case of Vietnam," Sustainability, MDPI, vol. 15(9), pages 1-19, April.
    2. Mehmet Asutay & Ubaidillah, 2024. "Examining the Impact of Intellectual Capital Performance on Financial Performance in Islamic Banks," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 1231-1263, March.
    3. Md Nur Nabi & Qijie Gao & Md Takibur Rahman & Shaun O. Britton & Mohammad Muzahidul Islam, 2020. "Intellectual Capital and Corporate Performance: Evidence From Banking Industry of Bangladesh," International Journal of Human Resource Studies, Macrothink Institute, vol. 10(1), pages 234259-2342, December.
    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.

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