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INTELLECTUAL CAPITAL AND BANKS PERFORMANCE: THE EMPIRICAL EVIDENCES FROM INDONESIAN ISLAMIC AND CONVENTIONAL BANKS

Year 2019, Volume: 6 Issue: 3, 149 - 157, 30.09.2019
https://doi.org/10.17261/Pressacademia.2019.1116

Abstract

Purpose- This study examines the influence of intellectual capital (IC) on bank performance measured by ROA, ROE and NIM.

Methodology- This study explores purposive sampling methods. Finannly, 10 Islamic banks and 30 Conventional banks were selected as a sample of this study for the period 2012-2016.

Findings- This study found that IC positively effect on bank performance that measured by ROA, ROE and NIM. In the context of IC dimensions, this study shows that HCE and CEE positively effect on bank performance that measured by ROA, ROE and NIM. Meanwhile, SCE positively affect to bank performance that measured by ROA only. The results of the study are sensitive to samples. For Islamic banks sub sample, this study found that IC positively effect on ROA, but it does not affect to ROE and NIM. HCE positively effect on ROA, but HCE negatively influence on ROE and HCE has no effect on the NIM. SCE negatively effect on ROA and ROE, but SCE has no effect on NIM. CEE Capital has a positive effect on ROA and NIM, but CEE has a negative effect on ROE. For conventional banks, IC has a positive effect on ROA and ROE, but IC does not affect the NIM. HCE and CEE have a positive effect on ROA, ROE and NIM. SCE has a positive effect on ROE, but SCE has a negative effect on the ROA and NIM

Conclusion- These findings indicate the optimum intellectual capital will be followed by better bank performance. However, the influencing of IC on bank performance is very susceptible to measurement and the sample.

References

  • Al-Musali, M. A. K. and Ismail, K. N. I. K. (2014). Intellectual capital and its effect on financial performance of banks: Evidence from Saudi Arabia. Procedia - Social and Behavioral Sciences, 164, 201-207, DOI: 10.1016/j.sbspro.2014.11.068
  • Barney, J., (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1),99-120, DOI: 10.1177/014920639101700108
  • Bontis, N. (1998). Intellectual capital: an exploratory study that develops measures and models. Management Decision, 36 (2), 63-76.
  • Chan, K.H. (2009), Impact of intellectual capital on organizational performance: an empirical study of companies in the Hang Seng Index (Part 1), The Learning Organization, 16(1), 4-21, DOI: 10.1108/09696470910927641
  • Chen, M. C, Cheng, S. J. and Hwang, Y. (2005). An empirical investigation of the relationship between intellectual capital and firms market value and financial performance. Journal of Intellectual Capital 6 (2), 159-176.
  • Dzenopoljac,V., Janoševic, S., and Bontis, N. (2016). Intellectual capital and financial performance in the Serbian ICT industry. Journal of Intellectual Capital, 17 (2), 373-396, DOI: 10.1108/14691930510592771
  • El-Bannany, M., (2008). A study of determinants of intellectual capital performance in banks: the UK case. Journal of Intellectual Capital, 9(3), 487-498, DOI: 10.1108/14691930810892045
  • Gogan, L. M.,, Artene, A., Sarca, L., and Draghici, A. (2016). The Impact of Intellectual Capital on Organizational Performance. Procedia - Social and Behavioral Sciences 221, 194 – 202, DOI: 10.1016/j.sbspro.2016.05.106
  • Janosevic, S., Dženopoljac,V., and Bontis, N. (2013). Intellectual capital and financial performance in Serbian. Knowledge and Process Management, 20 (1), 1- 11, DOI: 10.1002/kpm.1404
  • Joshi, M., Cahill, D., Sidhu, J. and Kansal, M. (2013). Intellectual capital and financialperformance: an evaluation of the Australian financial sector. Journal of Intellectual Capital, 14(2), 264-285, DOI: 10.1108/14691931311323887
  • Mondal, A. and Ghosh, S. K.,. (2012). Intellectual capital and financial performance of Indian banks. Journal of Intellectual Capital, 13(4), 515-530, DOI: 10.1108/14691931211276115
  • Nawaz, T., and Haniffa, R. (2017). Determinants of financial performance of Islamic banks: an intellectual capital perspective. Journal of Islamic Accounting and Business Research, 8 (2); 130 – 142, DOI: 10.1108/JIABR-06-2016-0071
  • Nimtrakoon, S. (2015). The relationship between intellectual capital, firms’ market value and financial performance: Empirical evidence from the ASEAN. Journal of Intellectual Capital 16(3), 587-618, DOI: /10.1108/JIC-09-2014-0104
  • O’Donnell, D. ang O’Regan, P. (2000). The structural dimensions of intellectual capital: emerging challenges for management and accounting. Southern African Business Review: Special Issue on Information Technology, 4(2), 14-20.
  • Pulic, A. (2004). Intellectual capital-does it create or destroy value?. Measuring Business Excellence, 8(1), 62-68, DOI: 10.1108/13683040410524757
  • Pulic, A., (2000). VAIC™–an accounting tool for IC management. International Journal of Technology Management, 20 (5-8),702-714, DOI 10.1504/IJTM.2000.002891
  • Pulic, A. (1998). Measuring the performance of intellectual potential in knowledge economy. available at: www.vaic-on.net
  • Puntillo, P. (2009). Intellectual Capital and Business Perfomance: Evidance from Italian Banking Industry. Journal of Corporate Finance Research, 4(12), 97-115.
  • Razafindrambinina, D. and Anggereni, T. (2011). Intellectual Capital and Corporate Financial Performance of Selected Listed Companies in Indonesia. Malaysian Journal of Economic Studies, 48(1), 61-77.
  • Riahi-Belkaoui, A. (2003). Intellectual capital and firm performance of US multinational firms:a study of the resource-based and stakeholder views, Journal of Intellectual Capital, 4(2), 215-226, DOI: 10.1108/14691930310472839
  • Stahle, P., Stahle, S., dan Aho, S. (2011). Value added intellectual coefficient (VAIC): a critical analysis. Journal of Intellectual Capital, 12(4), 531-551, DOI: 10.1108/14691931111181715
  • Stewart, T.A. (1998). Intellectual Capital: The New Wealth of Organizations, Currency Doubleday, New York, NY.
  • Zeghal, D. and Maaloul, A. (2010). Analysing value added as an indicator of intellectual capital and its consequences on company performance. Journal of Intellectual Capital, 11(1), 39-60, DOI: 10.1108/14691931011013325
Year 2019, Volume: 6 Issue: 3, 149 - 157, 30.09.2019
https://doi.org/10.17261/Pressacademia.2019.1116

Abstract

References

  • Al-Musali, M. A. K. and Ismail, K. N. I. K. (2014). Intellectual capital and its effect on financial performance of banks: Evidence from Saudi Arabia. Procedia - Social and Behavioral Sciences, 164, 201-207, DOI: 10.1016/j.sbspro.2014.11.068
  • Barney, J., (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1),99-120, DOI: 10.1177/014920639101700108
  • Bontis, N. (1998). Intellectual capital: an exploratory study that develops measures and models. Management Decision, 36 (2), 63-76.
  • Chan, K.H. (2009), Impact of intellectual capital on organizational performance: an empirical study of companies in the Hang Seng Index (Part 1), The Learning Organization, 16(1), 4-21, DOI: 10.1108/09696470910927641
  • Chen, M. C, Cheng, S. J. and Hwang, Y. (2005). An empirical investigation of the relationship between intellectual capital and firms market value and financial performance. Journal of Intellectual Capital 6 (2), 159-176.
  • Dzenopoljac,V., Janoševic, S., and Bontis, N. (2016). Intellectual capital and financial performance in the Serbian ICT industry. Journal of Intellectual Capital, 17 (2), 373-396, DOI: 10.1108/14691930510592771
  • El-Bannany, M., (2008). A study of determinants of intellectual capital performance in banks: the UK case. Journal of Intellectual Capital, 9(3), 487-498, DOI: 10.1108/14691930810892045
  • Gogan, L. M.,, Artene, A., Sarca, L., and Draghici, A. (2016). The Impact of Intellectual Capital on Organizational Performance. Procedia - Social and Behavioral Sciences 221, 194 – 202, DOI: 10.1016/j.sbspro.2016.05.106
  • Janosevic, S., Dženopoljac,V., and Bontis, N. (2013). Intellectual capital and financial performance in Serbian. Knowledge and Process Management, 20 (1), 1- 11, DOI: 10.1002/kpm.1404
  • Joshi, M., Cahill, D., Sidhu, J. and Kansal, M. (2013). Intellectual capital and financialperformance: an evaluation of the Australian financial sector. Journal of Intellectual Capital, 14(2), 264-285, DOI: 10.1108/14691931311323887
  • Mondal, A. and Ghosh, S. K.,. (2012). Intellectual capital and financial performance of Indian banks. Journal of Intellectual Capital, 13(4), 515-530, DOI: 10.1108/14691931211276115
  • Nawaz, T., and Haniffa, R. (2017). Determinants of financial performance of Islamic banks: an intellectual capital perspective. Journal of Islamic Accounting and Business Research, 8 (2); 130 – 142, DOI: 10.1108/JIABR-06-2016-0071
  • Nimtrakoon, S. (2015). The relationship between intellectual capital, firms’ market value and financial performance: Empirical evidence from the ASEAN. Journal of Intellectual Capital 16(3), 587-618, DOI: /10.1108/JIC-09-2014-0104
  • O’Donnell, D. ang O’Regan, P. (2000). The structural dimensions of intellectual capital: emerging challenges for management and accounting. Southern African Business Review: Special Issue on Information Technology, 4(2), 14-20.
  • Pulic, A. (2004). Intellectual capital-does it create or destroy value?. Measuring Business Excellence, 8(1), 62-68, DOI: 10.1108/13683040410524757
  • Pulic, A., (2000). VAIC™–an accounting tool for IC management. International Journal of Technology Management, 20 (5-8),702-714, DOI 10.1504/IJTM.2000.002891
  • Pulic, A. (1998). Measuring the performance of intellectual potential in knowledge economy. available at: www.vaic-on.net
  • Puntillo, P. (2009). Intellectual Capital and Business Perfomance: Evidance from Italian Banking Industry. Journal of Corporate Finance Research, 4(12), 97-115.
  • Razafindrambinina, D. and Anggereni, T. (2011). Intellectual Capital and Corporate Financial Performance of Selected Listed Companies in Indonesia. Malaysian Journal of Economic Studies, 48(1), 61-77.
  • Riahi-Belkaoui, A. (2003). Intellectual capital and firm performance of US multinational firms:a study of the resource-based and stakeholder views, Journal of Intellectual Capital, 4(2), 215-226, DOI: 10.1108/14691930310472839
  • Stahle, P., Stahle, S., dan Aho, S. (2011). Value added intellectual coefficient (VAIC): a critical analysis. Journal of Intellectual Capital, 12(4), 531-551, DOI: 10.1108/14691931111181715
  • Stewart, T.A. (1998). Intellectual Capital: The New Wealth of Organizations, Currency Doubleday, New York, NY.
  • Zeghal, D. and Maaloul, A. (2010). Analysing value added as an indicator of intellectual capital and its consequences on company performance. Journal of Intellectual Capital, 11(1), 39-60, DOI: 10.1108/14691931011013325
There are 23 citations in total.

Details

Primary Language English
Subjects Business Administration
Journal Section Articles
Authors

Saiful Saiful 0000-0002-3950-6696

Sintia Asfarawenti This is me 0000-0002-3950-6696

Publication Date September 30, 2019
Published in Issue Year 2019 Volume: 6 Issue: 3

Cite

APA Saiful, S., & Asfarawenti, S. (2019). INTELLECTUAL CAPITAL AND BANKS PERFORMANCE: THE EMPIRICAL EVIDENCES FROM INDONESIAN ISLAMIC AND CONVENTIONAL BANKS. Research Journal of Business and Management, 6(3), 149-157. https://doi.org/10.17261/Pressacademia.2019.1116
AMA Saiful S, Asfarawenti S. INTELLECTUAL CAPITAL AND BANKS PERFORMANCE: THE EMPIRICAL EVIDENCES FROM INDONESIAN ISLAMIC AND CONVENTIONAL BANKS. RJBM. September 2019;6(3):149-157. doi:10.17261/Pressacademia.2019.1116
Chicago Saiful, Saiful, and Sintia Asfarawenti. “INTELLECTUAL CAPITAL AND BANKS PERFORMANCE: THE EMPIRICAL EVIDENCES FROM INDONESIAN ISLAMIC AND CONVENTIONAL BANKS”. Research Journal of Business and Management 6, no. 3 (September 2019): 149-57. https://doi.org/10.17261/Pressacademia.2019.1116.
EndNote Saiful S, Asfarawenti S (September 1, 2019) INTELLECTUAL CAPITAL AND BANKS PERFORMANCE: THE EMPIRICAL EVIDENCES FROM INDONESIAN ISLAMIC AND CONVENTIONAL BANKS. Research Journal of Business and Management 6 3 149–157.
IEEE S. Saiful and S. Asfarawenti, “INTELLECTUAL CAPITAL AND BANKS PERFORMANCE: THE EMPIRICAL EVIDENCES FROM INDONESIAN ISLAMIC AND CONVENTIONAL BANKS”, RJBM, vol. 6, no. 3, pp. 149–157, 2019, doi: 10.17261/Pressacademia.2019.1116.
ISNAD Saiful, Saiful - Asfarawenti, Sintia. “INTELLECTUAL CAPITAL AND BANKS PERFORMANCE: THE EMPIRICAL EVIDENCES FROM INDONESIAN ISLAMIC AND CONVENTIONAL BANKS”. Research Journal of Business and Management 6/3 (September 2019), 149-157. https://doi.org/10.17261/Pressacademia.2019.1116.
JAMA Saiful S, Asfarawenti S. INTELLECTUAL CAPITAL AND BANKS PERFORMANCE: THE EMPIRICAL EVIDENCES FROM INDONESIAN ISLAMIC AND CONVENTIONAL BANKS. RJBM. 2019;6:149–157.
MLA Saiful, Saiful and Sintia Asfarawenti. “INTELLECTUAL CAPITAL AND BANKS PERFORMANCE: THE EMPIRICAL EVIDENCES FROM INDONESIAN ISLAMIC AND CONVENTIONAL BANKS”. Research Journal of Business and Management, vol. 6, no. 3, 2019, pp. 149-57, doi:10.17261/Pressacademia.2019.1116.
Vancouver Saiful S, Asfarawenti S. INTELLECTUAL CAPITAL AND BANKS PERFORMANCE: THE EMPIRICAL EVIDENCES FROM INDONESIAN ISLAMIC AND CONVENTIONAL BANKS. RJBM. 2019;6(3):149-57.

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