Title: The impact of intellectual capital on financial performance of commercial banks: the mediating role of competitive advantage

Authors: Mohammad Suleiman Awwad; Ali Muhammad Qtaishat

Addresses: Business Department, Faculty of Business, Mutah University, Karak, 61710, Jordan ' Auditing Department, Cairo Amman Bank, Amman, 11195, Jordan

Abstract: The purpose of this study is to investigate the impact of intellectual capital on the financial performance of Jordanian commercial banks and the mediating role of competitive advantage. The value-added intellectual coefficient (VAIC^TM) model was used to measure intellectual capital; asset utilisation ratio to measure competitive advantage; and return on assets to measure commercial banks' performance. This empirical research was conducted using panel data from the financial reports of 13 Jordanian commercial banks listed on the Amman Stock Exchange for the period 2009-2018. Data analysis was achieved using STATA 15. The findings indicate that intellectual capital and competitive advantage positively impact the financial performance of commercial banks. Also, competitive advantage mediates the relationship between intellectual capital and financial performance. In this context, intellectual capital plays a significant role in creating value for a firm's stakeholders and developing a competitive advantage that enables the firm to face the increasing competition, especially in the banking sector.

Keywords: value-added intellectual coefficient; VAIC^TM; intellectual capital; value-added; competitive advantage; financial performance; assets utilisation ratio; return on assets; ROA; commercial banks.

DOI: 10.1504/IJLIC.2023.127697

International Journal of Learning and Intellectual Capital, 2023 Vol.20 No.1, pp.47 - 69

Received: 22 Jun 2021
Accepted: 27 Jun 2022
Published online: 14 Dec 2022 *