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.

Monika Barak, Rakesh Kumar Sharma