Intellectual Capital and Financial Performance: An Evaluation of Islamic Banks in Pakistan

Khan, Muhammad Mahmood. Shah., Yasser, Farah., & Hussain, Talat. (2015). Intellectual Capital and Financial Performance: An Evaluation of Islamic Banks. Islamic Banking and Finance Review, 2(1), 59-75. ISSN 2221-5239. © 2015

12 Pages Posted: 8 Oct 2015

See all articles by Muhammad Mahmood Shah Khan

Muhammad Mahmood Shah Khan

University of Management and Technology (UMT), Pakistan

Farah Yasser

University of Management and Technology (UMT), Pakistan

Talat Hussain

University of Management and Technology (UMT), Pakistan

Date Written: 2015

Abstract

This study seeks to investigate the relationship between intellectual capital and bank’s performance in Pakistan. A sample of five major Islamic Banks in Pakistan namely Meezan Bank, Burj Bank, Dubai Islamic Bank, Bank Islami and Albaraka Bank had taken for the period of 2009 to 2014. Multiple regression analysis is used to show the relationship of intellectual capital and the bank’s performance. The results suggest that the bank’s performance (Return on asset, Return on equity) is positively and significantly related to the intellectual capital of Islamic Banks in Pakistan. The main components of intellectual capital that is structural capital efficiency, human capital efficiency and capital employed efficiency have significant impact on the bank’s performance. Human capital efficiency and capital employed efficiency show direct association with the bank’s performance whereas structural capital efficiency shows no relationship with the bank’s performance in Pakistan. This is the first study to investigate the relationship between the intellectual capital and bank’s performance of Islamic Banks in Pakistan.

Keywords: Intellectual capital, structural capital efficiency (SCE), human capital efficiency (HCE), capital employed efficiency (CEE), Bank’s performance and Islamic Banks.

JEL Classification: G21

Suggested Citation

Khan, Muhammad Mahmood Shah and Yasser, Farah and Hussain, Talat, Intellectual Capital and Financial Performance: An Evaluation of Islamic Banks in Pakistan (2015). Khan, Muhammad Mahmood. Shah., Yasser, Farah., & Hussain, Talat. (2015). Intellectual Capital and Financial Performance: An Evaluation of Islamic Banks. Islamic Banking and Finance Review, 2(1), 59-75. ISSN 2221-5239. © 2015 , Available at SSRN: https://ssrn.com/abstract=2671114

Muhammad Mahmood Shah Khan

University of Management and Technology (UMT), Pakistan ( email )

C-II
Lahore, Punjab 54770
Pakistan

Farah Yasser (Contact Author)

University of Management and Technology (UMT), Pakistan ( email )

Johar Town - Phase 1
Lahore, Punjab 54770
Pakistan

Talat Hussain

University of Management and Technology (UMT), Pakistan

C-II
Lahore, Punjab 54770
Pakistan

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