The Impact of Intellectual Capital on Commercial Banks’ Efficiency

Empirical Evidence from Arab Countries

Abstract

This study aimed to measure the impact of intellectual capital on commercial banks’ efficiency for a sample of 13 Arab Countries. The experimental part of this study relied on balanced annual panel data obtained from 121 commercial banks operating in the Arab countries under study during the time period (2011-2020). Using multiple linear regression analysis of the panel data, through applying the panel-corrected standard error (PCSE) estimation model. The results indicate that revealed a positive and significant effect of the value-added level indicator for intellectual capital (VAIC) on commercial banks’ efficiency, this result supports the "resource-based view" which indicates that intellectual capital may have a positive impact on the efficiency of commercial banks. In addition, the study found evidence that the human capital efficiency index (HCE) has a positive effect on the efficiency of commercial banks, while the results showed that the indicators of employed capital efficiency (CEE) and structural capital efficiency (SCE) have a negative impact on the efficiency of commercial banks. Based on that and the results of the study, it recommends Increasing interest and focus on intellectual capital, and in particular human capital, and investing in them due to its importance in enhancing and improving the efficiency of the banking sector.