The efficiency of GCC banks: the role of intellectual capital

Abstract

PurposeThis study aims to examine the impact of intellectual capital (IC) efficiency on bank’s operational, financial and market performance.Design/methodology/approachThe study examined 59 banks for 5 years to ends up with 295 observations. The independent variable is the modified value added IC component; the dependent variables are performance indicators (return on assets [ROA], return on equity [ROE] and Tobin’s Q [TQ]).FindingsThe findings deduced from the empirical results demonstrate that there is a positive relationship between intellectual capital efficiency and financial performance (ROE) and market performance (TQ).Originality/valueThe results of this study may give a wake-up call for banks to examine the reasons of imperfect relationship between the IC and asset efficiency (ROA).