Assessing the Connection between Intellectual Capital and Financial Success in Islamic Banking: Empirical Analysis

Dr. Farah Yasser, Dr. Ghulam Murtaza Lahbar, Dua Ali and Ali Raza Zaidi
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Dr. Farah Yasser: Assistant professor, Dr. Hasan Murad School of Management, University of Management and Technology, Lahore, Pakistan
Dr. Ghulam Murtaza Lahbar: Assistant Professor, Benazir School of Business, Benazir Bhutto Shaheed University, Lyari, Karachi, Pakistan
Dua Ali: MS Scholar, Bahria University Islamabad, Pakistan
Ali Raza Zaidi: Department of Business Administration, Government College University, Hyderabad, Pakistan

Bulletin of Business and Economics (BBE), 2024, vol. 13, issue 3, 197-202

Abstract: Intellectual capital (I.C.) and other intangible assets have changed the modern economy, especially knowledge-intensive fields like banking. Utilizing the VAIC model, the study examines the correlation between financial performance and I.C. efficiency in Islamic institutions in Pakistan. This research fills a void in the literature regarding Islamic banking's role in improving financial performance by concentrating on Islamic banking's distinctive context governed via Shariah-compliant principles. The research sample includes 11 Islamic banks; more studies evaluate I.C. components and banks' financial performance through AMOS software. The findings suggest that greater I.C. efficiency, mainly through human and structural capital, positively impacts financial outcomes, offering insights into how Islamic banks optimize intangible assets to enhance financial performance. This research helps banks improve economic competitiveness and sustainability, centred on knowledge and recognition of Islamic banking I.C.'s strategic position.

Keywords: Intellectual capital; HCE; CEE; SCE; Islamic banking; financial performance (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:rfh:bbejor:v:13:y:2024:i:3:p:197-202

DOI: 10.61506/01.00469

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