Document Type : Original Research

Authors

Vytautas Magnus University, Finance Department, Kaunas, Lithuania

Abstract

The purpose of the study is to analyze the impact of intellectual capital efficiency impact on the European listed banks performance. In this paper concept of intellectual capital and its components is analyzed and empirical research is performed testing the impact of intellectual capital efficiency on European small and large listed banks financial performance. Data of the research cover period from 2005 -2014. Intellectual capital efficiency impact on banks financial performance is measured for the sample of 118 (52 small and 66 large banks) listed European banks according to their value of total assets.  The intellectual capital is calculated by using Value Added Intellectual Capital Coefficient (VAIC) method. For measuring banks financial performance banks profitability, productivity and risk ratios are used. Results of the research support hypothesis that banks intellectual capital has an impact on the financial performance and differences are evident in large and small European listed banks. Authors conclude that intellectual capital had negative impact on large banks financial performance after the financial crisis and negative impact on small banks financial performance before the financial crisis.

Keywords

Al-Musailli, M.A.K., Izah, K.N., Ismail,K. (2012). Corporate governance, bank specific characteristics, banking industry characteristics, and intellectual capital (IC) performance of banks in Arab Gulf Cooperation Council (GCC) countries. Asian Academy of Management Journal of Accounting & Finance. 2012, Vol. 8 Issue Supp1, 115-134.
Celenza, D., Rossi, F. (2014). Intellectual capital and performance of listed companies: empirical evidence from Italy. Measuring Business Excellence, Vol. 18 Iss 1. 22 - 35
Curado C., Guedes M., Bontis N. (2014). The Financial Crisis of Banks (Before, During and After): An Intellectual Capital Perspective. Knowledge & Process Management. Apr-Jun 2014, Vol. 21 Issue 2, 103-111.
Ghosh, S. K., Maji, S. G. (2014).The Impact of Intellectual Capital on Bank Risk: Evidence from Indian Banking Sector. IUP Journal of Financial Risk Management. Sep 2014, Vol. 11 Issue 3, 18-38.
Growe G., DeBruine John M., Y. Lee J., F. Maldonado T., 2014. The Profitability and Performance Measurement of U.S. Regional Banks Using the Predictive Focus of the Fundamental Analysis Research. In Advances in Management Accounting. 02 Dec 2014, 189-237.
Harsh P., Tandon K. (2015). Intellectual Capital, Financial Performance and Market Valuation: A Study on IT and pharmaceutical Companies in India. The IUP Journal of Knowledge Management, Vol. XIII, No. 2, 2015, 7-24.
Iazzolino, G., Migliano, G., Gregorace, E. (2013). Evaluating intellectual capital for supporting credit risk assessment: an empirical study. Investment Management and Financial Innovations, Volume 10, Issue 2, 114-140.
Kang Wang W.,Wang Y. Lu W. (2012). The relationship between bank performance and intellectual capital in East Asia. Quality & Quantity. Feb 2013, Vol. 47 Issue 2, 1041-1062.
Mahdi, S.,Seraj, M.,Habibi, A.,Reza, M. (2014). The Effect of Intellectual Capital on the Profitability Ratios in the Banking Industry: Evidence from Iran. IUP Journal of Bank Management. Feb 2014, Vol. 13 Issue 1, 38-52. 15p.,
Manzara, M., Kazemi, M., Nazemi, S & Pooya, A. (2012). Intellectual capital: Concepts, components and indicators: A literature review. Management Science Letters, 2(7), 2255-2270.
Mondal, A., Ghosh, S.K. (2012). Intellectual capital and financial performance of Indian banks. Journal of Intellectual Capital, Vol. 13 Iss 4, 515 – 530.
Morariu, C. M., (2014). Intellectual capital performance in the case of Romanian public companies. Journal of Intellectual Capital, Vol. 15 Iss 3, 392 – 410.
Nimtrakoon S. (2015). The relationship between intellectual capital, firms’ market value and financial performance. Journal of Intellectual Capital, Vol. 16 Iss 3, 587 – 618.
Sang, H. K., Dennis, T. (2014). Intellectual capital vs the book-value of assets. Journal of Intellectual Capital, Vol. 15 Iss 1, 65 – 82.
Sehic, D., Mujkic, A., Jusic, J., Kovasevic, J. (2014). impact of intellectual capital on profitability of banks in Bosnia and Herzegovina. Conference Proceedings: International Conference of the Faculty of Economics Sarajevo (ICES). 2014, 100-110.
Stankevičienė A., Liučvaitienė A. (2012). Intelektinio kapitalo vertinimo aspektai. Verslas: Teorija ir praktika, 2012 13(1), 79–93.
Tamošiūnaitė R., Dementjeva J., Remeikis R. (2012) . Intelektinio kapitalo koncepcija. Teorinė studija, Vilnius: Avada.
Vaičekauskaitė R. (2014). Intelektinis kapitalas kaip mokslo ir vertinimo bendradarbiavimo stiprinimo potencialas. Tiltai, 2014, 3, 1–16.
Wang, Z., Wang, N., Liang, H. (2014). Knowledge sharing, intellectual capital and firm performance. Management Decision, Vol. 52 Iss 2, 230 – 258.
Wee, J., Chua, A. (2014). The Communication of Intellectual Capital and its Relationship with Organizational Performance. Proceedings of the International Conference on Intellectual Capital, Knowledge Management & Organizational Learning, 2014.
Yong T., Christos F., 2012. Bank profitability and inflation: the case of China. Journal of Economic Studies, Vol. 39 Iss 6, 675 – 696