INTELLECTUAL CAPITAL EFFICIENCY AND BANK PERFORMANCE IN BANGLADESH: EVIDENCE FROM DHAKA STOCK EXCHANGE

Abstract

Intellectual capital (IC) is an important source of competitive advantage in modern firms, including the banking sector. This study explores the impact of IC on the profitability, market value, and productivity of banks listed on the Dhaka Stock Exchange in Bangladesh. The study uses Tobin's q to measure market value and reviews the theoretical and empirical literature on the impact of IC on financial performance measures based on the resource-based view of firms. The study finds that IC positively affects the profitability, market value, and productivity of Bangladeshi banks. The impact of human capital on profits was positive, while that of structural capital was negative. However, human capital negatively impacted productivity, while structural capital had no impact on productivity. Capital employed did not affect the financial performance of the sample banks. The findings suggest that banks in Bangladesh have not fully realized the potential of IC to gain a competitive advantage in the market.