Title: Intellectual capital and financial performance nexus in Indian public sector banks

Authors: Mithilesh Gidage; Shilpa Bhide

Addresses: Department of Management Sciences (PUMBA), Savitribai Phule Pune University, Pune, India ' Department of Management Sciences (PUMBA), Savitribai Phule Pune University, Pune, India

Abstract: This study delves into the impact of intellectual capital (IC) on the financial performance (FP) of Indian public sector banks (IPSBs) over the period from 2013 to 2023. Utilising the modified value-added intellectual coefficient (MVAIC) methodology, we gauge IC and apply a panel data estimation approach, specifically the generalised method of moments (GMM), to examine the relationship between IC and FP indicators. Our findings highlight significant influences of IC components - namely, human capital (HC), capital employed (CE), structural capital (SC), and relational capital (RC) - on FP metrics including return on assets (ROA), return on equity (ROE), return on capital employed (ROCE), earnings per share (EPS), and Tobin's Q. Noteworthy is the favourable impact of MVAIC on both ROA and ROE. Additionally, the study reveals a negative correlation between leveraging and financial indicators, suggesting adverse effects of heightened debt on bank value. The objective of this research is to offer insights to stakeholders and policymakers on optimising the allocation of IC for sustainable FP and value generation within Indian IPSBs.

Keywords: intellectual capital; Indian public sector banks; IPSBs; modified value-added intellectual coefficient; MVAIC; generalised method of moments; GMM; return on assets; ROA; human capital.

DOI: 10.1504/IJIPM.2025.150746

International Journal of Intellectual Property Management, 2025 Vol.15 No.6, pp.574 - 597

Received: 10 May 2024
Accepted: 27 Sep 2024
Published online: 22 Dec 2025 *

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