Intellectual capital performance in the banking sector An assessment of Australian owned banks

Intellectual capital performance in the banking sector An assessment of Australian owned banks Purpose – The purpose of this paper is to examine the intellectual capital (IC) performance of Australian banks for the period 2005‐2007. It also aims to examine the relationship amongst various constituents of IC performance. Design/methodology/approach – The value added intellectual coefficient (VAIC™) approach developed by Pulic is used to determine the IC performance of the Australian banks. The required data to calculate different constituents of IC was obtained from the annual reports of Australian banks. Findings – The paper reveals that VAIC™ has a significant relation with human costs and the value addition made by the Australian banks. All Australian owned banks have relatively higher human capital efficiency than capital employed efficiency and structural capital efficiency. The size of the bank in terms of total assets, total number of employees and total shareholders equity has little or no impact on the IC performance of the Australian owned banks. Research limitations/implications – The paper analyses IC performance of only 11 Australian owned banks. However, the more than 90 per cent market share enjoyed by these banks still promises a degree of validation of the results of the paper from the Australian perspective or similar banking structure in some countries. Practical implications – The findings may serve as a useful input for bankers to apply knowledge management in their institutions and in addressing the factors affecting IC performance in order to maximise their value creation. The findings of the study would also provide some information to the stakeholders and potential investors to assess the value creation capabilities of this group of banks. Originality/value – This is the first paper that examines the relationship of VAIC™ and the size of the firms for Australian owned banks in Australia. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Human Resource Costing & Accounting Emerald Publishing

Intellectual capital performance in the banking sector An assessment of Australian owned banks

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Publisher
Emerald Publishing
Copyright
Copyright © 2010 Emerald Group Publishing Limited. All rights reserved.
ISSN
1401-338X
DOI
10.1108/14013381011062649
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to examine the intellectual capital (IC) performance of Australian banks for the period 2005‐2007. It also aims to examine the relationship amongst various constituents of IC performance. Design/methodology/approach – The value added intellectual coefficient (VAIC™) approach developed by Pulic is used to determine the IC performance of the Australian banks. The required data to calculate different constituents of IC was obtained from the annual reports of Australian banks. Findings – The paper reveals that VAIC™ has a significant relation with human costs and the value addition made by the Australian banks. All Australian owned banks have relatively higher human capital efficiency than capital employed efficiency and structural capital efficiency. The size of the bank in terms of total assets, total number of employees and total shareholders equity has little or no impact on the IC performance of the Australian owned banks. Research limitations/implications – The paper analyses IC performance of only 11 Australian owned banks. However, the more than 90 per cent market share enjoyed by these banks still promises a degree of validation of the results of the paper from the Australian perspective or similar banking structure in some countries. Practical implications – The findings may serve as a useful input for bankers to apply knowledge management in their institutions and in addressing the factors affecting IC performance in order to maximise their value creation. The findings of the study would also provide some information to the stakeholders and potential investors to assess the value creation capabilities of this group of banks. Originality/value – This is the first paper that examines the relationship of VAIC™ and the size of the firms for Australian owned banks in Australia.

Journal

Journal of Human Resource Costing & AccountingEmerald Publishing

Published: Jun 29, 2010

Keywords: Intellectual capital; Human capital; Banking; Australia

References

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