Intellectual capital performance of Bangladeshi banks: A comparative study of conventional and Islamic banks

Abstract

Drawing on the Resource-Based View (RBV) and Stakeholder Theory as a ground, this paper investigates the intellectual capital (IC) performance of Bangladeshi banks across conventional and Islamic banking organizations. Data were compiled from the annual reports of eight Islamic banks and twenty-two conventional banks listed on the Dhaka Stock Exchange (DSE) between 2014 and 2023. The current investigation aims to use descriptive statistics to highlight important features of the dataset. As well, the affiliations among various variables were evaluated using t-tests and a robust panel regression. The outcomes exhibited that IC has diverse effects on the two banking systems, based on the ingredients of the Modified Value-Added Intellectual Coefficient (MVAIC) model. For conventional banks, the results indicate that IC efficiency is not a significant predictor of accounting performance (Return on Assets and Return on Equity), but it is positively associated with market performance (Tobin’s Q). Conversely, IC in Islamic banks has a strong positive correlation with accounting performance (Return on Assets and Return on Equity).  Amusingly, IC has a significant adverse connection with market performance (Tobin’s Q). Policymakers and bank management should highlight mainly human, structural, and capital employed efficiencies, as they may be strategic priorities for improving banks' financial performance, especially in the rapidly expanding Islamic banking segment.