IMPACT OF INTELLECTUAL CAPITAL ON PROFITABILITY OF COMMERCIAL BANKS IN SERBIA

Siniša Radić

Economic Annals, 2018, vol. 63, issue 216, 85 - 110

Abstract: The subject of the research in this paper is the impact of intellectual capital efficiency on the profitability of commercial banks in the Republic of Serbia. The efficiency of commercial banks’ intellectual capital was measured by the created value added in the observed period, using the Value Added Intellectual Coefficient methodology (VAIC). Empirical analysis was carried out using econometric analysis of panel data for 27 banks that were operating in the banking sector of the Republic of Serbia in the period 2008–2016. The results of the analysis show that the significance of the impact of the efficient use of intellectual capital on the profitability of banks operating in Serbia depends on the selected profitability measure. When ROA is chosen as an indicator of profitability the bank’s level of indebtedness determines the sign of this influence, so at higher levels of indebtedness efficient use of intellectual capital negatively affects the profitability of the bank. On the other hand, in this case the size of the bank does not significantly affect the dependence of the bank’s profitability on the efficient use of its intellectual capital. If ROE is a measure of the profitability of banks the efficient use of intellectual capital has no significant impact on banks’ profitability.

Keywords: intellectual capital; profitability; commercial banks; Value Added Intellectual Coefficient (VAIC) (search for similar items in EconPapers)
JEL-codes: C23 M41 O34 (search for similar items in EconPapers)
Date: 2018
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