Determinants of the intellectual capital efficiency of listed banks in Nigeria: a DEA approach

Abstract

Purpose – This study empirically investigates the level of intellectual capital efficiency amongst the listed commercial banks in Nigeria and the factors influencing its efficient utilisation. Design/methodology/approach – The paper employs the data envelopment analysis (DEA) to determine intellectual capital efficiency for the listed banks in Nigeria using data obtained from their annual financial reports from 2013 to 2019. After obtaining the efficiency scores, the Tobit regression technique was used to analyse the impact of firm-specific factors on intellectual capital efficiency. Findings – The study found that only 8.33% of the sampled Nigerian commercial banks are at optimum capacity in utilising their intellectual capital, while 91.67% are inefficient. It also finds that bank size and directors' shareholdings positively impact intellectual capital efficiency, while market and ownership concentration debar the attainment of optimum intellectual capital efficiency. Research limitations/implications – This study contributes to very scare literature on intellectual capital efficiency measurements by using the non-parametric analysis (DEA) to measure intellectual capital efficiency for listed banks in Nigeria. Practical implications – This study showcases the importance of measuring intellectual capital efficiency amongst listed banks in Nigeria. It provides more information to the regulators and stakeholders on the need to enforce the disclosure of the value created from intellectual capital investment. Originality/value – This study contributes to the scarce literature on measuring intellectual capital efficiency using a non-parametric analysis (DEA). It also provides new insights into the factors that influence intellectual capital efficiency amongst listed commercial banks in Nigeria.

Keywords

• Intellectual capital efficiency
• Data envelopment analysis
• Listed banks
• Nigeria