Asian Journal of Research in Banking and Finance
Year : 2017, Volume : 7, Issue : 6
First page : ( 155) Last page : ( 171)
Online ISSN : 2249-7323.
Article DOI : 10.5958/2249-7323.2017.00056.6

Intellectual capital efficiency and financial performance in Indian banking sector

Dr. Singh Raman Deep

Assistant Professor, Department of Commerce, Sri Venkateswara College, University of Delhi, India. ramandeepjrf@gmail.com

Online published on 22 June, 2017.

Abstract

The present study empirically examines the relationship between intellectual capital components (human, structural and physical capital) and financial performance measures (profitability and market valuation) of Indian banking sector. The value added intellectual coefficient (VAIC^TM) model has been employed to measure the intellectual capital efficiency. The correlation and panel regression models have been used in order to analyze the relationship. The results found that IC has a significant effect on profitability but not showing any association with market valuation. The study also evinced that individually, human capital, a major constituent of IC does not have any significant role in increasing the market valuation of the banks. The structural and physical capital significantly influences profitability of banks. The top level managers should give much emphasis to human resources for increasing the profitability and market valuation of the banks.

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Keywords

Intellectual capital, Human Capital Efficiency, Structural Capital Efficiency, Capital Employed Efficiency, Profitability and Market Valuation.

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