Determinants of intellectual capital performance in banks: empirical insights from an emerging market

King Carl Tornam Duho and Joseph Mensah Onumah

Afro-Asian Journal of Finance and Accounting, 2021, vol. 11, issue 4, 583-606

Abstract: This study examines the determinants of intellectual capital performance (ICP) of banks in an emerging market. The value added intellectual coefficient (VAIC™) model is used to measure ICP and data envelopment analysis has been used to measure technical efficiency. We employ an unbalanced panel data of 32 banks over the period 2000-2017. The study found that income diversification, asset tangibility, human capital investment, cost efficiency, operational risk, leverage and bank stability are the main determinants of ICP. Diversification strategy interacts with other variables in informing ICP. Generally, to improve ICP, a focused strategy is favoured over a diversified strategy. However, to enhance value creation, some contextual peculiarities can be explored as guides to make strategic choices. The results and the implications are relevant for bank practitioners, financial analysts and management accountants in emerging economies. It is also relevant for the newly formed Financial Stability Council of Ghana, sector regulators, policymakers, educators and the research community.

Keywords: intellectual capital; data envelopment analysis; banking; efficiency; risk; Basel accord; integrated reporting; VAIC™; Ghana; Africa. (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:ids:afasfa:v:11:y:2021:i:4:p:583-606

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