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Impact of Intellectual Capital on Financial Performance of Banks in Tanzania

Author

Listed:
  • Janeth N. Isanzu

    (School of Management, Wuhan University of Technology, Wuhan, P.R.China, 430070)

Abstract

Since the financial sector reforms took place in the last two decades, Banks in Tanzania have continued to play the major role in reshaping the economy of the nation. With the emergence of knowledge based economy many firm have changed their way of doing business instead of relying more on physical capital they have shifted to intellectual capital. This is no exception for the banks operating in developing counties Tanzania included. Many studies have been done in the area of intellectual capital and its contribution to the value of the firm. This study sets out to extend the evidence by investigating the intellectual capital of banks operating in Tanzania for the period of four years from 2010 to 2013. Annual reports, especially the profit and loss accounts and balance sheets of the selected banks have been used to obtain the data. The study uses Value Added Intellectual Capital model (VAICTM) in determining intellectual capital and its three major components like Human Capital Efficiency (HCE) Structural capital efficiency (SCE) and Capital Employed Efficiency (CEE). The results revealed that Intellectual capital has a positive relationship with financial performance of banks operating in Tanzania and also when the VAICTM was divided into its three components it was discovered that the financial performance is positively related to Human capital efficiency and Capital employed efficiency but is negatively related to Structural capital efficiency.

Suggested Citation

  • Janeth N. Isanzu, 2015. "Impact of Intellectual Capital on Financial Performance of Banks in Tanzania," Journal of International Business Research and Marketing, Inovatus Services Ltd., vol. 1(1), pages 16-23, November.
    • Handle: RePEc:mgs:jibrme:v:1:y:2015:i:1:p:16-23
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    Citations

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    Cited by:

    1. Nguyet Thi Nguyen, 2023. "The Impact of Intellectual Capital on Service Firm Financial Performance in Emerging Countries: The Case of Vietnam," Sustainability, MDPI, vol. 15(9), pages 1-19, April.
    2. Rilla Gantino, 2020. "Leadership Style, Intellectual Capital and Corporate Social Responsibility on Performance, a Comparison Model of Listed Companies in Indonesia," GATR Journals afr192, Global Academy of Training and Research (GATR) Enterprise.
    3. Monika Barak & Rakesh Kumar Sharma, 2023. "Investigating the Impact of Intellectual Capital on the Sustainable Financial Performance of Private Sector Banks in India," Sustainability, MDPI, vol. 15(2), pages 1-21, January.
    4. Al Shahrani Saad M & Al Shahrani Saad M, 2016. "The Impact of Organizational Factors on Financial Performance: Building a Theoretical Model," International Journal of Management Science and Business Administration, Inovatus Services Ltd., vol. 2(7), pages 51-56, June.
    5. Al Shahrani Saad M & Al Shahrani Saad M, 2016. "The Impact of Organizational Factors on Financial Performance: Building a Theoretical Model," International Journal of Innovation and Economic Development, Inovatus Services Ltd., vol. 2(7), pages 51-56, June.
    6. Monika Barak & Rakesh Kumar Sharma, 2024. "Does intellectual capital impact the financial performance of Indian public sector banks? An empirical analysis using GMM," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-11, December.
    7. Elwira Gross-Golacka & Marta Kusterka-Jefmanska & Radoslaw Miskiewicz & Bartlomiej Jefmanski & Agnieszka Rzepka & Teresa Kupczyk, 2021. "The Intellectual Capital and its Impact on the Sustainable Development of the SML-Sized Enterprises in Poland," European Research Studies Journal, European Research Studies Journal, vol. 0(2B), pages 410-429.
    8. Sam-Quarm, Richmond & Busharads, Mohamed Osman Elamin & Septiadi, Tedi & Institute of Research, Asian, 2020. "Intellectual Capital, Bank Profitability, and Bank Value," OSF Preprints y6n75, Center for Open Science.

    More about this item

    Keywords

    Intellectual Capital; Banks; Value Added Intellectual Capital (VAICTM); financial performance;
    All these keywords.

    JEL classification:

    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General

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