Does intellectual capital efficiency improve bank performance and financial stability? Evidence from Bangladesh Online publication date: Fri, 01-Sep-2023
by Swadip Bhattacharjee
International Journal of Learning and Intellectual Capital (IJLIC), Vol. 20, No. 5, 2023
Abstract: The study tries to examine the impact of intellectual capital (IC) efficiency on financial and market performance and financial stability of banks in Bangladesh through the lens of resource-based view (RBV) and knowledge-based view (KBV). This study measures IC efficiency by adopting 'value-added intellectual coefficient' (VAIC) approach suggested by Pulic (1998, 2000). Return on assets (ROA), market to book ratio (MB ratio), and Z-score are used as indicators of banks' financial and market performance, and distress risk to quantity financial stability, respectively. The findings show that IC efficiency accelerates banks' financial performance, while IC consideration degrades banks' market performance and increases their insolvency risks. Furthermore, the study finds that physical and financial capital is the primary contributor to bank performance and long-term growth. The findings emphasise the importance of building an intellectual asset base, in enhancing bank efficiency and promote financial stability.
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