Author(s): Jahid Khan Rahat and Md. Kaysher Hamid
Abstract: Intellectual capital is receiving increased attention in today’s world because of its significant influence on a firm’s profitability and valuation.
This study investigates the impact of intellectual capital on firm performance in the banking sector of Bangladesh. A quantitative research approach has been applied in this research. Secondary data is collected from 30 commercial banks registered with Dhaka Stock Exchange (DSE) from 2017 to 2022. Modified Value-Added Intellectual Coefficient (MVAIC) model is used to measure the level of intellectual capital for the selected banks. Following the Resource-Based View (RBV) theory, this research establishes the relationship between the components of the MVAIC model and the selected dependent variables. The dependent variables are Return on Assets (ROA), Return on Equity (ROE), Tobin's Q (TBQ), and Operational Efficiency (OE). The independent variables representing intellectual capital are Human Capital Efficiency, Structural Capital Efficiency, Relational Capital Efficiency, and Capital Employed Efficiency. In addition, control variables include firm size, firm leverage, and firm age. After data collection, descriptive analysis, correlation analysis, and panel data regression analysis have been conducted. In addition, Breusch and Pagan Lagrangian Multiplier (LM) Test and Hausman Test have been performed to check the suitability of regression model.The study found that Human Capital Efficiency, Structural Capital Efficiency, and Relational Capital Efficiency have significant impact on ROA and ROE. In addition, Structural Capital Efficiency is found significant with TBQ and OE. Other variables are found to be insignificant. The outcomes of this study would support the policymakers to recognize the intellectual capital components that can significantly influence the bank performance in Bangladesh.