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Does Intellectual Capital Foster Deposit Growth in Banking System? Empirical Evidence from a Developing Economy

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  • Trung Duc Nguyen

    (Ho Chi Minh University of Banking, Vietnam)

  • Chi Huu Lu

    (Ho Chi Minh University of Banking, Vietnam)

Abstract

[Objective] This study investigates the relationship between intellectual capital (IC) efficiency and deposit growth in Vietnamese banks. IC refers to intangible knowledge-based assets like employee competencies, processes, and customer relationships. [Methodology] The paper analyzes a sample of 26 commercial banks in Vietnam from 2006 to 2020 and uses the Value-added Intellectual Coefficient model to measure IC efficiency. [Findings] The results indicate a positive influence of overall IC on deposit growth. However, the effect of individual IC components varies, with human and structural capital enhancing deposits while capital employed efficiency reducing deposits. The findings suggest smaller banks leverage IC more effectively for deposit mobilization than larger banks. [Implications] The research offers insights for bank executives on utilizing IC to attract deposits and for policymakers on regulating IC investment. Practical strategies for developing IC and theoretical directions for future research are discussed. [Novelty] The study provides the first empirical evidence of the linkage between IC and bank deposit growth.

Suggested Citation

  • Trung Duc Nguyen & Chi Huu Lu, 2024. "Does Intellectual Capital Foster Deposit Growth in Banking System? Empirical Evidence from a Developing Economy," Advances in Decision Sciences, Asia University, Taiwan, vol. 28(2), pages 93-115, June.
    • Handle: RePEc:aag:wpaper:v:28:y:2024:i:2:p:93-115
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    References listed on IDEAS

    as
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    4. Vo, Duc, 2018. "Should Bankers Be Concerned with Intellectual Capital? A Study of the Thai Banking Sector," MPRA Paper 103275, University Library of Munich, Germany.
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    More about this item

    Keywords

    Knowledge-based Management; Intellectual Capital; Deposit Growth; Banking Industry; Developing Country;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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