Purpose This paper examines the effect of intellectual capital on bank productivity in an emerging market in Africa. Design/methodology/approach The Malmquist Productivity Index is employed to estimate productivity growth of 18 banks in Ghana from 2003 to 2011 while the Value Added Intellectual Coefficient is used to measure bank intellectual capital performance. The panel-corrected standard errors estimation technique is used to estimate a panel regression model with Malmquist Productivity Index as the dependent variable. Bank market concentration and bank size are controlled for in the regression analysis. Findings We find productivity growth to be largely driven by efficiency changes compared to technological changes. The results from the regression analysis indicate that Value Added Intellectual Coefficient has a positive effect on the productivity of banks in Ghana. We also find human capital efficiency and capital employed efficiency as the components of Value Added Intellectual Coefficient that drive productivity growth in the banking industry. Bank size and industry concentration are also identified as significant drivers of productivity in the market. Practical implications The study’s findings support investments in intellectual capital as a means of improving the performance of banks in emerging markets Originality/value To the best of our knowledge, this is the first study to empirically examine the relationship between intellectual capital and productivity in an emerging banking market in Africa.
Purpose The purpose of this paper is to examine the relationship between intellectual capital (IC) and profitability of insurance companies in Ghana. Design/methodology/approach Data on 36 life and non-life insurance companies from 2007 to 2011 are employed to estimate the value added intellectual coefficient of Pulic (2004, 2008). Using return on assets and underwriting profit as indicators of profitability, the ordinary least squares panel corrected standard errors of Beck and Katz (2005) is used in estimating the relationship in the presence of serial correlation and heteroskedasticity. Leverage, underwriting risk and insurers’ size are used as control variables. Findings Non-life insurers have high IC performance comparative to life insurers. This study finds a significant positive relationship between IC and profitability of insurers in Ghana while human capital efficiency is the main driver of insurers’ IC performance. Practical implications The study discusses relevance of IC for management of insurance companies in Ghana and other emerging insurance markets in Africa. Originality/value This appears to be the first study to examine the impact of IC on profitability of a developing insurance market in Africa.
Intellectual Capital (IC) has become a prominent feature of business transactions and discourse. The rising interests in IC and Intellectual Capital Disclosure (ICD) issues in both developed and developing countries have necessitated insightful studies. This study explores ICD in Ghana and seeks to contribute to fill the dearth in the literature on ICD from the perspective of developing countries. The study examines the ICD of 25 companies listed on the Ghana Stock Exchange (GSE) over a five-year period (2006)(2007)(2008)(2009)(2010) through content analysis of their corporate annual reports. The study revealed that the ICD level in annual reports in Ghana is quite high and descriptively reported and though disclosure of IC is improving but at a relatively marginal rate. Therefore looking at the trend of ICDs by the companies, the study recommends the need for accounting regulatory bodies and oversight agencies (local and global) to develop specific standards or guidelines on identifying, measuring and reporting IC. This paper is one of the few studies to have investigated the disclosure of IC in corporate annual reports in Ghana.
PurposeThis study examines the causal relationship between intellectual capital and asset quality of banks in Ghana.Design/methodology/approachUsing annual data extracted from audited financial statements of 24 banks from 2006 to 2015, a ratio of non-performing loans to gross loans and advances is employed to estimate asset quality growths while the value-added intellectual coefficient by Pulic (2008, 2004) measures intellectual capital. The panel-corrected standard errors estimation technique is used to estimate panel regressions with asset quality as the dependent variable.FindingsAsset quality of banks in Ghana is generally not affected by intellectual capital. However, when intellectual capital is divided into its components, the study indicates that there are significant positive relationships between asset quality and two components of intellectual capital. Thus, structural capital and human capital efficiencies positively affect the asset quality of banks.Practical implicationsThe findings of the study implore managements of banks to increase structural and human capital investments and efficiencies to improve asset quality. Furthermore, the results have direct implications on developments in financial markets in emerging economies.Originality/valueThe study analyses the link between typical intellectual capital and asset quality of banks which is yet to be empirically examined in an emerging banking market.
PurposeThis study examines the nature of the relationship between board structures (BSs) and intellectual capital (IC) of banks in Africa.Design/methodology/approachUsing annual data from financial statements of 366 banks from 26 African countries from 2007 to 2015, the study estimates IC using the value-added intellectual coefficient (VAIC) and BSs using board size, board independence and board gender diversity. The system generalized method of moments and panel-corrected standard error estimation strategies are used to estimate panel regressions.FindingsThere is a significant negative relationship between board independence and intellectual capital. The results also indicate that the IC of banks does not depend on board size and board gender diversity.Practical implicationsThe study's findings provide evidence of the extent to which BSs have been instituted to support investments in intellectual capital as a means of improving the performance of banks in Africa.Originality/valueThis study provides some empirical evidence from Africa's banking sector to justify that banks with better IC have boards that are less independent. This study is one of the few studies that employs many countries' data.
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