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The Effect of Intellectual Capital on Financial Performance of Banks Listed in Tehran Stock Exchange

Author

Listed:
  • Zarei , Ameneh

    (Department of Accounting, Hamadan Branch, Islamic Azad University)

  • Shamszade , Bagher

    (Faculty of Economics and Social Sciences, Bu-Ali Sina University)

  • Zarei , Zhale

    (Monetary and Banking Research Institute (MBRI), Central Bank of the Islamic Republic of Iran (CBI))

Abstract

The aim of this paper is to empirically investigate the effect of Intellectual Capital (IC) and its components on financial performance of Iranian banks accepted in Tehran Stock Exchange (TSE). The financial performances were measured by return on equity (ROE), return on assets (ROA), assets turnover (ATO), and book to market ratio (MB). This research covers 14 banks listed in TSE over the period 2004 - 2013 and use VAIC method as a quantifiable measure to assess the intellectual capital and its components. The result of regression analysis shows that structural capital and human capital efficiency have positive and significant effects on banks' financial performance. Also, the first lag of physical capital efficiency has positive and significant effect on ROA, ROE, and ATO, but, its effect on MB is not significant. Finally, estimations show that the effect of IC on the financial performance of banks is positive and significant.

Suggested Citation

  • Zarei , Ameneh & Shamszade , Bagher & Zarei , Zhale, 2014. "The Effect of Intellectual Capital on Financial Performance of Banks Listed in Tehran Stock Exchange," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 9(4), pages 49-73, July.
    • Handle: RePEc:mbr:jmonec:v:9:y:2014:i:4:p:49-73
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    More about this item

    Keywords

    Intellectual capital; Return on equity; Return on assets; Book to market ratio; Assets turnover;
    All these keywords.

    JEL classification:

    • E03 - Macroeconomics and Monetary Economics - - General - - - Behavioral Macroeconomics
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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