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

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 ...