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Intellectual capital profiles and financial performance of Islamic banks in the UK

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  • Tasawar Nawaz

Abstract

The main contribution of this paper is to report on the impact of intellectual capital (IC) on financial performance of Islamic banks operating in the UK. Two distinct measures, return on average assets (ROAA) and return on average equity (ROAE) are used to measure the financial performance. The paper also controls for number of employees and bank size. Results based on the regression analysis suggest that IC efficiency proxied by the value added intellectual coefficient (VAIC) relates positively with financial performance of Islamic banks in the UK. The analysis further suggests that bank size and number of employees equally contribute in banks' achieving higher financial performance. Additionally, the paper further ghettoises sub-components of IC namely; capital employed, human capital and structural capital to analyse the discrete impact of these IC constituents on financial performance. The analysis of the sub components suggests a positive relationship between physical and financial capital employed efficiency, human capital efficiency and performance.

Suggested Citation

  • Tasawar Nawaz, 2019. "Intellectual capital profiles and financial performance of Islamic banks in the UK," International Journal of Learning and Intellectual Capital, Inderscience Enterprises Ltd, vol. 16(1), pages 87-97.
    • Handle: RePEc:ids:ijlica:v:16:y:2019:i:1:p:87-97
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    Citations

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    Cited by:

    1. 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.
    2. Muhammad Farhan Basheer & Waeibrorheem Waemustafa & Mohamad Helmi Bin Hidthiir & Saira Ghulam Hassan, 2021. "Explaining the endogeneity between the credit risk, liquidity risk, and off-balance sheet activities in commercial banks: a case of South Asian economies," International Journal of Monetary Economics and Finance, Inderscience Enterprises Ltd, vol. 14(2), pages 166-187.
    3. Roszaini Haniffa & Mohammad Hudaib & Tasawar Nawaz, 2022. "The Value of Social Capital for the Success of SPAC IPOs," IJFS, MDPI, vol. 10(2), pages 1-15, May.
    4. Wang, Xiaoying & Sadiq, Ramla & Khan, Tahseen Mohsan & Wang, Rong, 2021. "Industry 4.0 and intellectual capital in the age of FinTech," Technological Forecasting and Social Change, Elsevier, vol. 166(C).
    5. Kanishka Gupta & T. V. Raman, 2021. "The nexus of intellectual capital and operational efficiency: the case of Indian financial system," Journal of Business Economics, Springer, vol. 91(3), pages 283-302, April.

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