Intellectual capital and financial performance of Islamic banks: a meta-analysis

Muhammad Bilal Zafar and Talha Yasin

Accounting Research Journal, 2025, vol. 38, issue 2, 245-262

Abstract: PurposeThis study aims to meta-synthesize the relationship between intellectual capital (IC) and the financial performance of Islamic banks. Specifically, it examines how different components of IC – human capital, structural capital, relational capital and capital employed – impact key financial performance metrics, including return on assets (ROA), return on equity (ROE) and Tobin’s Q (TQ).Design/methodology/approachA comprehensive meta-analysis was conducted, following the PRISMA guidelines, to synthesize findings from 29 peer-reviewed journal articles indexed in Scopus and Web of Science having accumulative sample size of 8,871. Effect sizes were calculated using Fisher’s r-to-z transformation, and a random-effects model was applied to estimate the overall effect sizes. Subgroup meta-analyses were performed to evaluate the relationships between specific components of IC and various financial performance measures.FindingsThe meta-analysis confirms a positive and statistically significant effect size (r = 0.227, p < 0.001) between IC and financial performance in Islamic banks. Human capital shows the strongest positive impact on ROA and ROE, highlighting the role of skilled employees in driving success. Structural and relational capital exhibit weaker and variable effects, whereas capital employed significantly enhances profitability. These findings underscore the complex nature of the IC–financial performance link, emphasizing the need for strategic management to optimize IC benefits.Originality/valueThis study fills a gap in the existing literature by providing a comprehensive meta-analysis focused on Islamic banks, which operate under unique principles compared to conventional banks. By highlighting the significant role of IC, particularly human capital, this research offers valuable insights for academics, practitioners and policymakers aiming to enhance the financial performance and sustainability of Islamic banks through strategic management of intellectual assets.

Keywords: Intellectual capital; Financial performance; Islamic banks; Meta-analysis (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:arjpps:arj-07-2024-0245

DOI: 10.1108/ARJ-07-2024-0245

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