Human capital and financial performance of Islamic banks: a meta-analysis

Abstract

Purpose This paper aims to meta-analyze the results of the prior studies related to the relationship of human capital and financial performance in Islamic banking. Design/methodology/approach To examine the relationship between human capital and financial of Islamic banks, 23 empirical studies having sample of 15,607 are considered for the meta-analysis. Moreover, different measures related to financial performance including return on assets (ROA), return of equity (ROE) and Tobin’s Q have been taken as moderating for further subgroup analysis. Findings The results of meta-analysis reveal a positive correlation between human capital and financial performance with an effect size of 0.268. The subgroup analyses showed significant positive associations of human capital with ROA and ROE, insignificant with Tobin’s Q. Originality/value This study suggests Islamic banking should prioritize human capital development, maintain consistency and adopt a long-term perspective. Future research should consider context-specific factors and harmonize human capital and financial performance measurements for consensus.