Does Intellectual Capital Foster Deposit Growth in Banking System? Empirical Evidence from a Developing Economy

Trung Duc Nguyen and Chi Huu Lu
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Trung Duc Nguyen: Ho Chi Minh University of Banking, Vietnam
Chi Huu Lu: Ho Chi Minh University of Banking, Vietnam

Advances in Decision Sciences, 2024, vol. 28, issue 2, 93-115

Abstract: [Objective] This study investigates the relationship between intellectual capital (IC) efficiency and deposit growth in Vietnamese banks. IC refers to intangible knowledge-based assets like employee competencies, processes, and customer relationships. [Methodology] The paper analyzes a sample of 26 commercial banks in Vietnam from 2006 to 2020 and uses the Value-added Intellectual Coefficient model to measure IC efficiency. [Findings] The results indicate a positive influence of overall IC on deposit growth. However, the effect of individual IC components varies, with human and structural capital enhancing deposits while capital employed efficiency reducing deposits. The findings suggest smaller banks leverage IC more effectively for deposit mobilization than larger banks. [Implications] The research offers insights for bank executives on utilizing IC to attract deposits and for policymakers on regulating IC investment. Practical strategies for developing IC and theoretical directions for future research are discussed. [Novelty] The study provides the first empirical evidence of the linkage between IC and bank deposit growth.

Keywords: Knowledge-based Management; Intellectual Capital; Deposit Growth; Banking Industry; Developing Country (search for similar items in EconPapers)
JEL-codes: G21 G28 O31 (search for similar items in EconPapers)
Date: 2024
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