Should Bankers Be Concerned with Intellectual Capital? A Study of the Thai Banking Sector

Vo, Duc (2018): Should Bankers Be Concerned with Intellectual Capital? A Study of the Thai Banking Sector. Published in: Journal of Intellectual Capital , Vol. 19, No. 5 : pp. 897-914.

Abstract

Purpose – The purpose of this paper is to examine the causal effect of intellectual capital (IC) performance on financial performance at Thai listed banks. Design/methodology/approach – Data are collected from 16 listed banks in Thailand for the period 1997–2016. This paper uses the value-added intellectual coefficient methodology suggested by Pulic (1998, 2004) to measure IC. This study employs a fixed-effects and random-effects model and generalized method of moments (GMM) estimator to investigate the causal effect of IC on financial performance. Findings – The results show that bank profitability is driven mainly by capital employed efficiency to make a profit. However, human capital efficiency marginally reduces bank profitability in the current period but has positive effects on future profitability. Research limitations/implications – First, this study does not cover data on foreign banks, which reduces the generalizability of the results. Second, financial statements can be manipulated through accounting adjustments. Lastly, subsequent research should control for more bank characteristics, such as bank ownership, the non-performing loan ratio and R&D expenditure. Practical implications – To achieve higher future profitability, banks should not only manage their physical and financial capital effectively but also improve employee efficiency. Originality/value – This paper contributes to the literature on IC in the banking sector in emerging countries. Moreover, this paper is the first to employ the GMM method in the banking context to address possible endogeneity problems

• Item Type: MPRA Paper
• Language: English
• Keywords: Financial performance, VAIC, Thailand, Intellectual capital, Banking sector
• Subjects: M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M1 - Business Administration; M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M2 - Business Economics

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