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Dynamics of intellectual capitals and bank efficiency in India

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  • Harishankar Vidyarthi

Abstract

This article attempts to examine the impact of intellectual capitals and its sub-components on the bank’s efficiency parameters for 38 listed Indian banks within multivariate panel data framework during the period from 2004–2005 to 2015–2016. The study uses the non-parametric Data Envelopment Analysis approach to estimate technical, pure technical and scale efficiency in the first stage, followed by computing Value Added Intellectual Capital and Modified Value Added Intellectual Capital as an indicator for intellectual capital performance. Finally, Tobit regression results suggest that intellectual capitals have statistically significant and positive but very low impact on all the three efficiency scores. At the sub-component level, only human capital efficiency has a significant impact with low value on the all three efficiency measures. Bank size and leverage are also found to be significant drivers of bank efficiency as well. Thus, the study’s findings support higher investment in intellectual capitals in order to further improve the banking efficiency and value creation in India by adopting appropriate policy by management for proper input allocations, particularly human capital and capital employed in coming years.

Suggested Citation

  • Harishankar Vidyarthi, 2019. "Dynamics of intellectual capitals and bank efficiency in India," The Service Industries Journal, Taylor & Francis Journals, vol. 39(1), pages 1-24, January.
  • Handle: RePEc:taf:servic:v:39:y:2019:i:1:p:1-24
    DOI: 10.1080/02642069.2018.1435641
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    Citations

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    Cited by:

    1. 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.
    2. Ming-Chung Chang & Chiang-Ping Chen & Chien-Cheng Lin & Yu-Ming Xu, 2022. "The Overall and Disaggregate China’s Bank Efficiency from Sustainable Business Perspectives," Sustainability, MDPI, vol. 14(7), pages 1-16, April.
    3. Hongxing Yao & Muhammad Haris & Gulzara Tariq & Hafiz Mustansar Javaid & Muhammad Aamir Shafique Khan, 2019. "Intellectual Capital, Profitability, and Productivity: Evidence from Pakistani Financial Institutions," Sustainability, MDPI, vol. 11(14), pages 1-30, July.
    4. Jian Xu & Muhammad Haris & Hongxing Yao, 2019. "Should Listed Banks Be Concerned with Intellectual Capital in Emerging Asian Markets? A Comparison between China and Pakistan," Sustainability, MDPI, vol. 11(23), pages 1-23, November.
    5. Wei-han Liu & Qian Long Kweh, 2022. "Reexamining nonlinear effects of intellectual capital on firm efficiency," Annals of Operations Research, Springer, vol. 315(2), pages 1319-1344, August.
    6. Hafiz Ali Javed & Naveed Ahmad Khan & Silke Michalk & Noor Ullah Khan & Muhammad Kamran, 2023. "High-Performance Work System and Innovation Capabilities: The Mediating Role of Intellectual Capital," Administrative Sciences, MDPI, vol. 13(1), pages 1-19, January.
    7. Camelia Oprean-Stan & Sebastian Stan & Vasile Brătian, 2020. "Corporate Sustainability and Intangible Resources Binomial: New Proposal on Intangible Resources Recognition and Evaluation," Sustainability, MDPI, vol. 12(10), pages 1-23, May.
    8. Jian Xu & Binghan Wang, 2019. "Intellectual Capital Performance of the Textile Industry in Emerging Markets: A Comparison with China and South Korea," Sustainability, MDPI, vol. 11(8), pages 1-16, April.

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