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Does intellectual capital impact the financial performance of Indian public sector banks? An empirical analysis using GMM

M. Barak and R. K. Sharma

Discover how intellectual capital influences the financial performance of Indian public sector banks in a groundbreaking study by Monika Barak and Rakesh Kumar Sharma. This research unveils the strong positive correlation between various elements of intellectual capital and key financial indicators, providing essential insights for stakeholders and policymakers aiming for sustainable growth.

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Abstract

This study investigates the impact of intellectual capital (IC) on the financial performance (FP) of Indian public sector banks (IPSBs) from 2010 to 2021. Using the modified value-added intellectual coefficient (MVAIC) approach to measure IC and the generalized method of moments (GMM) for estimation, the findings reveal a significant positive impact of IC (and its sub-elements: human capital, capital employed, structural capital, and relational capital) on various FP indicators (ROA, ROE, ROCE, EPS, Tobin's Q). Leverage showed a negative impact on FP. The study aims to guide stakeholders and policymakers in optimizing IC allocation for sustainable FP and value creation in Indian IPSBs.

Publisher

Humanities & Social Sciences Communications

Published On

Feb 03, 2024

Authors

Monika Barak, Rakesh Kumar Sharma