Title: Impact of intellectual capital on bank efficiency in emerging markets: evidence from Ghana

Authors: Joseph Mensah Onumah; King Carl Tornam Duho

Addresses: Department of Accounting, University of Ghana Business School, P.O. Box LG 78, Legon, Ghana ' Department of Accounting, University of Ghana Business School, P.O. Box LG 78, Legon, Ghana

Abstract: Various researchers have examined the relationship between intellectual capital (IC) and performance of banks. Yet, only few studies have examined the nexus between IC and bank efficiency especially in Africa. Using the VAIC™ model of Pulic (2000) [and its additive components human capital efficiency (HCE), structural capital efficiency (SCE) and capital employed efficiency (CEE)] to measure IC and data envelopment analysis to estimate efficiency scores, the current study used Ghanaian data of 32 banks from 2000 to 2015 to examine the nexus. The study found that risk-adjusted efficiency scores are higher than non-risk adjusted scores. There is evidence suggesting that IC instigates efficiency in banks. This is borne largely from HCE suggesting the prevalence of the human capital theory. The results of the impact of SCE and CEE are insignificant except for the significant positive impact of CEE on profit efficiency. Stock exchange listing increases efficiency scores especially risk-adjusted efficiency. Other exogenous variables such as size, leverage and concentration were controlled for with the results discussed into detail. The results have implications for bank regulation, bank management and future research.

Keywords: intellectual capital; human capital; VAIC™ banking accounting finance; data envelopment analysis; DEA; technical efficiency; cost efficiency; profit efficiency; emerging technologies; isotonicity; credit risk; integrated reporting; Africa; Ghana.

DOI: 10.1504/IJBAAF.2020.110303

International Journal of Banking, Accounting and Finance, 2020 Vol.11 No.4, pp.435 - 460

Received: 05 Feb 2018
Accepted: 07 Feb 2019

Published online: 14 Oct 2020 *

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