Heliyon (Jul 2023)
Does intellectual capital drive bank's performance in Bangladesh? Evidence from static and dynamic approach
Abstract
This paper investigates the relationship between measures of intellectual capital efficiency and the performance of the listed banks in Bangladesh. We have collected data from the listed bank's published annual reports for seven years (2015–2021). We have primarily used standard panel data analysis techniques to assess the static relationships. In addition, to the static models, we have also checked the dynamic models for robustness in the context of Bangladesh. Following the RBV (Resource Based theory), we have found that the MVAIC (Modified Value-Added Intellectual Coefficient) significantly and positively determines firm performance in both static and dynamic methods. However, various components of MVAIC show differing relationships, which indicates that the two-step system GMM (Generalized Method of Moments) is superior to static models. The moderating role of MEETING (Company Meetings) is significant with respect to MVAIC. In addition, the moderating role of corporate governance variables at the component level remained the same in both methods. Our further analysis of the association with respect to the before and during pandemic periods suggests that the relationship remains the same irrespective of the period under study. Future research can use this paper to understand the significance of dynamic modeling while studying IC (Intellectual Capital) in an emerging economy context. This is among a few studies that have applied both static and dynamic models to assess the relationship between IC and firm performance in the context of emerging economies. Policymakers and bank managers in Bangladesh could use the findings of this study to realize that IC is much more valuable than other available tangible assets in creating a sustainable competitive advantage.
