Intellectual capital and financial performance: An evaluation of the Australian financial sector

Journal of Intellectual Capital

Volumn 14, Issue 2, 2013, Pages 264-285

  Joshi, Mahesh ^a   Cahill, Daryll ^a   Sidhu, Jasvinder ^a   Kansal, Monika ^b  

^a RMIT UNIVERSITY   (Australia)

^b DEAKIN UNIVERSITY   (Australia)

Author keywords

Australia; Banks; Financial performance; Financial reporting; Financial sector; Human capital; Intellectual capital; Knowledge management; Value added intellectual coefficient

Indexed keywords

EID: 84878239433     PISSN: 14691930     EISSN: None     Source Type: Journal    
DOI: 10.1108/14691931311323887     Document Type: Article

References (96)

1. Abidin, Z.Z., Kamal, N.M., Jusoff, K. (2009), "Board structure and corporate performance in Malaysia" in International Journal of Economics and Finance, Vol. 1, No. 1, pp. 150-164.
2. Ahangar, R.G. (2010), "The relationship between intellectual capital and financial performance: an empirical investigation in an Iranian company" in African Journal of Business Management, Vol. 5, No. 1, pp. 88-95.
3. Ahonen, G., Hussi, T. (2002), "Managing intangible assets - a question of integration and delicate balance" in Journal of Intellectual Capital, Vol. 3, No. 3, pp. 277-286.
4. Alipour, M. (2012), "The effect of intellectual capital on company performance: an investigation of Iran insurance companies" in Measuring Business Excellence, Vol. 16, No. 1, pp. 53-66.
5. Andriessen, D. (2004), "Intellectual capital valuation and measurement: classifying the state of the art" in Journal of Intellectual Capital, Vol. 5, No. 2, pp. 230-242.
6. Anon (1998), Knowledge for Development, World Development Report, World Bank, Washington, DC.
7. Anon (2010), The Financial Development Report 2010, World Economic Forum, Austrade, New York, NY.
8. Anon (2011a), "Financial sector profile, Australian Stock Exchange", available at:.
9. Anon (2011b), Australia: A Wealth of Opportunities, Benchmark Report 2011, Australian Trade Commission, Canberra.
10. Barros, L.J., Aguiar, J.F., Basso, L.C., Kimura, H. (2010), "Intangible assets and value creation at Brazilian companies: an application for the Brazilian textile manufacturing sector" in Journal of Academy of Business and Economic, Vol. 10, No. 1, pp. 39-52.
11. Besharati, E., Kamali, S., Mazhari, H.R., Soheila, M. (2012), "An investigation of relationship between intellectual capital and innovation capital with financial performance and value of companies accepted in Tehran Stock Exchange" in Journal of Basic and Applied Scientific Research, Vol. 2, No. 2, pp. 1241-1245.
12. Bontis, N. (1998), "Intellectual capital: an exploratory study that develops measures and models" in Management Decision, Vol. 36, No. 2, pp. 63-76.
13. Bontis, N. (2001), "Assessing knowledge assets: a review of the models used to measure intellectual capital" in International Journal of Management Review, Vol. 3, No. 1, pp. 41-60.
14. Bontis, N., Keow, W.C., Richardson, S. (2000), "Intellectual capital and business performance in Malaysian industries" in Journal of Intellectual Capital, Vol. 1, No. 1, pp. 85-100.
15. Bornemann, M. (1999), "Potential of value systems according to the VAICTM method" in International Journal of Technology Management, Vol. 18, Nos 5-8, pp. 463-475.
16. Bramhandkar, A., Erickson, S., Applebee, I. (2007), "Intellectual capital and organizational performance: an empirical study of the pharmaceutical industry" in The Electronic Journal of Knowledge Management, Vol. 5, No. 4, pp. 357-362, available at:.
17. Bukh, P.N. (2003), "The relevance of intellectual capital disclosure: a paradox?" in Accounting, Auditing and Accountability Journal, Vol. 16, No. 1, pp. 49-56.
18. Bukh, P.N., Nielsen, C., Gormsen, P., Mouritsen, J. (2005), "Disclosure of information on intellectual capital in Danish IPO prospectuses" in Accounting, Auditing and Accountability Journal, Vol. 18, No. 6, pp. 713-732.
19. Cabrita, M., Vaz, J. (2005), "Intellectual capital and value creation: evidence from the Portuguese banking industry" in The Electronic Journal of Knowledge Management, Vol. 4, No. 1, pp. 11-20.
20. Cahill, D., Myers, P.J. (2000), "Intellectual capital and accounting concepts: unresolved issues from human resources accounting", paper presented at Annual Conference of the British Accounting Association, Manchester, 11-13 April.
21. Calisir, F., Gumussoy, C.A., Bayraktaroglu, A.E., Deniz, E. (2010), "Intellectual capital in the quoted Turkish ITC sector" in Journal of Intellectual Capital, Vol. 11, No. 4, pp. 538-554.
22. Chan, K.H. (2009a), "Impact of intellectual capital on organisational performance: an empirical study of companies in the Hang Seng Index (Part 2)" in The Learning Organization, Vol. 16, No. 1, pp. 4-21.
23. Chan, K.H. (2009b), "Impact of intellectual capital on organisational performance: an empirical study of companies in the Hang Seng Index (Part 2)" in The Learning Organization, Vol. 16, No. 1, pp. 22-39.
24. Chang, S.L. (2007), "Valuing intellectual capital and firms' performance: modifying value added intellectual coefficient (VAICTM) in Taiwan IT industry", unpublished doctoral dissertation, Golden Gate University, San Francisco, CA.
25. Chang, W.S., Hsieh, J.J. (2011a), "Intellectual capital and value creation - is innovation capital a missing link?" in International Journal of Business and Management, Vol. 6, No. 2, pp. 1-12.
26. Chang, W.S., Hsieh, J.J. (2011b), "The dynamics of intellectual capital in organizational development" in African Journal of Business Management, Vol. 5, No. 6, pp. 2345-2355.
27. Chen, M.C., Cheng, S., Hwang, Y. (2005), "An empirical investigation of the relationship between intellectual capital and firms' market value and financial performance" in Journal of Intellectual Capital, Vol. 6, No. 2, pp. 159-176.
28. Chu, S.K.W., Chan, K.H., Wu, W.Y. (2011), "Charting intellectual capital performance of the gateway to China" in Journal of Intellectual Capital, Vol. 12, No. 2, pp. 249-276.
29. Clarke, M., Seng, D., Whiting, R.H. (2011), "Intellectual capital and firm performance in Australia" in Journal of Intellectual Capital, Vol. 12, No. 4, pp. 505-530.
30. Drucker, P.F. (1999), "Knowledge-worker productivity: the biggest challenge" in California Management Review, Vol. 41, No. 2, pp. 79-94.
31. El-Bannany, M. (2008), "A study of determinants of intellectual capital performance in banks: the UK case" in Journal of Intellectual Capital, Vol. 9, No. 3, pp. 487-498.
32. Field, A. (2005), Discovering Statistics Using SPSS, 2nd ed., Sage Publications, London, Thousand Oaks and New Delhi.
33. Firer, S., Williams, S.M. (2003), "Intellectual capital and traditional measures of corporate performance" in Journal of Intellectual Capital, Vol. 4, No. 3, pp. 348-360.
34. Flamholtz, E. (1974), "Human resource accounting: a review of theory and research" in Journal of Management Studies, Vol. 11, No. 1, pp. 44-61.
35. Foray, D. (2006), "Optimizing the use of knowledge" in Foray, D. and Kahin, B. (Eds.), Advancing Knowledge and the Knowledge Economy, MIT Press, Cambridge, MA, pp. 9-16.
36. Gan, K., Saleh, Z. (2008), "Intellectual capital and corporate performance of technology-intensive companies: Malaysia evidence" in Asian Journal of Business and Accounting, Vol. 1, No. 1, pp. 113-130.
37. Ghosh, S., Mondal, A. (2009), "Indian software and pharmaceutical sector intellectual capital and financial performance" in Journal of Intellectual Capital, Vol. 10, No. 3, pp. 369-388.
38. Goh, P.K. (2005), "Intellectual capital performance of commercial banks in Malaysia" in Journal of Intellectual Capital, Vol. 6, No. 3, pp. 385-396.
39. Haniffa, R.M., Cooke, T.E. (2002), "Culture, corporate governance and disclosure in Malaysian corporations" in Abacus, Vol. 38, No. 3, pp. 317-49.
40. Holland, J. (2003), "Intellectual capital and the capital market-organisation and competence" in Accounting, Auditing and Accountability Journal, Vol. 16, No. 1, pp. 39-48.
41. Joshi, M., Cahill, D., Sidhu, J. (2010), "Intellectual capital performance in the banking sector: an assessment of Australian owned banks" in Journal of Human Resource Costing & Accounting, Vol. 14, No. 2, pp. 151-170.
42. Kamath, G.B. (2007), "The intellectual capital performance of Indian banking sector" in Journal of Intellectual Capital, Vol. 8, No. 1, pp. 96-123.
43. Kamath, G.B. (2008), "Intellectual capital and corporate performance in Indian pharmaceutical industry" in Journal of Intellectual Capital, Vol. 9, No. 4, pp. 684-704.
44. Komnenic, B., Pokrajcic, D. (2012), "Intellectual capital and corporate performance of MNCs in Serbia" in Journal of Intellectual Capital, Vol. 13, No. 1, pp. 106-119.
45. Kujansivu, P. (2005), "Intellectual capital performance in Finnish companies", Paper presented at 3rd Conference on Performance Measurement and Management Control, Nice, pp. 1-14.
46. Kujansivu, P., Lonnqvist, A. (2007), "Investigating the value and efficiency of intellectual capital" in Journal of Intellectual Capital, Vol. 8, No. 2, pp. 272-287.
47. Laing, G., Dunn, J., Hughes-Lucas, S. (2010), "Applying the VAIC™ model to Australian hotels" in Journal of Intellectual Capital, Vol. 11, No. 3, pp. 269-283.
48. Lajili, K., Zéghal, D. (2005), "A content analysis of risk management disclosure in Canadian annual reports" in Canadian Journal of Administrative Sciences, Vol. 22, No. 2, pp. 125-142.
49. Lev, B. (2001), Intangibles: Management, Measurement, and Reporting, Brookings Institution Press, Washington, DC.
50. Lev, B. (2004), "Sharpening the intangibles edge" in Harvard Business Review, Vol. 82, No. 6, pp. 109-116.
51. Lev, B., Zarowin, P. (1999), "The boundaries of financial reporting and how to extend them" in Journal of Accounting Research, Vol. 37, No. 2, pp. 353-385.
52. Lonnqvist, A. (2004), "Measurement of intangible success factors: case studies on the design, implementation and use of measures", doctoral dissertation, Publication No. 475, Tampere University of Technology, Tampere.
53. Maditinos, D., Chatzoudes, D., Tsairidis, C., Theriou, G. (2011), "The impact of intellectual capital on firms' market value and financial performance" in Journal of Intellectual Capital, Vol. 12, No. 1, pp. 132-151.
54. Makki, M.A.M., Lodhi, S.A., Rahman, R. (2009), "Intellectual capital performance of Pakistani listed corporate sector" in International Journal of Business and Management, Vol. 3, No. 10, pp. 45-51.
55. Mavridis, D.G. (2003a), "Are Greek listed firms knowledge workers: an empirical investigation", proceedings of the 1st Conference for Quantitative Methods, Athens, 26-28 May.
56. Mavridis, D.G. (2003b), "Human capital and business excellence aspects of Greek listed firms", proceedings of the 1st International Conference on Performance Measures, Benchmarking and Best Practices in New Economy - Business Excellence 2003, University of Minho, Guimarães, 10-13 June.
57. Mavridis, D.G. (2003c), "Ownership related intellectual capital performance due to the marital status of listed firms - evidence from Greece", paper presented at the 16th Panhellenic Statistic Conference of the Greek Statistical Institute, University of Macedonia, TEI Kavala, Kavala, 30 April-3 May.
58. Mavridis, D.G. (2004), "The intellectual capital performance of the Japanese banking sector" in Journal of IC, Vol. 5, No. 1, pp. 92-115.
59. Mavridis, D., Kyrmizoglou, G.P. (2005), "Intellectual capital performance drivers in the Greek banking sector" in Management Research News, Vol. 28, No. 5, pp. 43-62.
60. Mavridis, D.G. (2005), "Intellectual capital performance determinants and globalization status of Greek-listed firms" in Journal of Intellectual Capital, Vol. 6, No. 1, pp. 127-140.
61. Mayo, A. (2001), The Value of the Enterprise: Valuing People as Assets - Monitoring, Measuring, Managing, Nicholas Brealey Publishing, London.
62. Mehralian, G., Rajabzadeh, A., Sadeh, M.R., Rasekh, H.R. (2012), "Intellectual capital and corporate performance in Iranian pharmaceutical industry" in Journal of Intellectual Capital, Vol. 13, No. 1, pp. 138-158.
63. Mohiuddin, M., Najibullah, S., Shahid, A.I. (2006), "An exploratory study on intellectual capital performance of the commercial banks in Bangladesh" in The Cost and Management, Vol. 34, No. 6, pp. 40-54.
64. Mosavi, S.A., Nekoueizadeh, S., Ghaedi, M. (2012), "A study of relations between intellectual capital components, market value and finance performance" in African Journal of Business Management, Vol. 6, No. 4, pp. 1396-1403.
65. Nik, M.N.M., Filzah, M.I., Nik Rozhan, N.I. (2009), "Intellectual capital efficiency level of Malaysian financial sector: panel data analysis (2002-2006)", available at:.
66. OECD (1996), The Knowledge Based Economy, Organisation for Economic Co-operation and Development (OECD), Paris.
67. Pal, K., Soriya, S. (2012), "Intellectual capital performance of Indian pharmaceutical and textile industry" in Journal of Intellectual Capital, Vol. 13, No. 1, pp. 120-137.
68. Petty, R., Guthrie, J. (2000), "Intellectual capital literature review: measurement, reporting and management" in Journal of Intellectual Capital, Vol. 1, No. 2, pp. 155-176.
69. Phusavat, K., Comepa, N., Sitko-Lutek, A., Ooi, K. (2011), "Interrelationships between intellectual capital and performance empirical examination" in Industrial Management & Data Systems, Vol. 111, No. 6, pp. 810-829.
70. Pike, S., Roos, G. (2004), "Mathematics and modern business management" in Journal of Intellectual Capital, Vol. 5, No. 2, pp. 243-256.
71. Prahalad, C.K., Hamel, G. (1998), "The core competence of the corporation" in Ulrich, D. (Ed.), Delivering Results: A New Mandate for Human Resource Professionals, Harvard Business School Press, Boston, MA, pp. 45-68.
72. Pulic, A. (2000), MVA and VAICTM Analysis of Randomly Selected Companies from FTSE 250, Austrian IC Research Center, Graz and London.
73. Pulic, A. (2002), "Are we creating or destroying value?", available at:.
74. Pulic, A. (2003), "Intellectual capital - does it create or destroy value?", submitted to PMA IC Symposium, Cranfield, 30 September-2 October.
75. Pulic, A. (2004), "Intellectual capital - does it create or destroy value?" in Measuring Business Excellence, Vol. 8, No. 1, pp. 62-68.
76. Pulic, A., Bornemann, M. (1997), "The physical and intellectual capital of Austrian banks", available at:.
77. Saengchan, S. (2008), "The role of intellectual capital in creating value in the (Thai) banking industry", available at:.
78. Sharma, E., Mani, M. (2012), "A comparative analysis of human capital efficiency of public and private banks in India" in Research Journal of Finance and Accounting, Vol. 3, No. 1, pp. 55-64.
79. Shiu, H.J. (2006), "Application of the VAIC method to measure corporate performance: a quintile regression approach" in Journal of American Academy of Business, Vol. 8, No. 2, pp. 156-160.
80. Singh, S., Kansal, M. (2011), "Voluntary disclosures of intellectual capital: an empirical analysis" in Journal of Intellectual Capital, Vol. 12, No. 2, pp. 301-318.
81. Ståhle, P., Ståhle, S., Aho, S. (2011), "Value added intellectual coefficient (VAIC): a critical analysis" in Journal of Intellectual Capital, Vol. 12, No. 4, pp. 531-551.
82. Stewart, T.A. (2001), The Wealth of Knowledge: Intellectual Capital and the Twenty-First Century Organization, Doubleday, New York, NY.
83. Sveiby, K.E. (1997), The New Organizational Wealth: Managing and Measuring Knowledge-Based Assets, Berrett-Koehler Publishers, San Francisco, CA.
84. Tabachnick, B.G., Fidell, L.S. (1996), Using Multivariate Statistics, HarperCollins Publishers, New York, NY.
85. Tan, H.P., Plowman, D., Hancock, P. (2007), "Intellectual capital and financial returns of companies" in Journal of Intellectual Capital, Vol. 8, No. 1, pp. 76-95.
86. Ting, I.W.K., Lean, H.H. (2009), "Intellectual capital performance of financial institutions in Malaysia" in Journal of Intellectual Capital, Vol. 10, No. 4, pp. 588-599.
87. Tseng, C., Goo, J. (2005), "Intellectual capital and corporate value in an emerging economy: empirical study of Taiwanese manufacturers" in R&D Management, Vol. 35, No. 2, pp. 187-201.
88. United Nations Development Program (2010), "Human development report: 40 - year trends analysis shows poor countries making faster development gains", Multidimensional Proverty Index MPI, The Human Development Reports.
89. Veltri, S., Silvestri, A. (2011), "Direct and indirect effects of human capital on firm value: evidence from Italian companies" in Journal of Human Resource Costing & Accounting, Vol. 15, No. 3, pp. 232-254.
90. Wang, M. (2011), "Measuring intellectual capital and its effect on financial performance: evidence from the capital market in Taiwan" in Front. Bus. Res. China, Vol. 5, No. 2, pp. 243-265.
91. Williamson, O.E. (1975), Markets and Hierarchies, Analysis and Antitrust Implications: A Study in the Economics of Internal Organization, Free Press, New York, NY.
92. Wood, J. (2003), "Australia: an under performing knowledge nation?" in Journal of Intellectual Capital, Vol. 4, No. 2, pp. 144-164.
93. Yalama, A., Coskun, M. (2007), "Intellectual capital performance of quoted banks on the Istanbul stock exchange market" in Journal of Intellectual Capital, Vol. 8, No. 2, pp. 256-271.
94. Young, C.-S., Su, H.-Y., Fang, S.-C., Fang, S.-R. (2009), "Cross-country comparison of IC performance of commercial banks in Asian economies" in The Service Industries Journal, Vol. 29, No. 11, pp. 1565-1579.
95. Zéghal, D., Maaloul, A. (2010), "Analysing value added as an indicator of intellectual capital and its consequences on company performance" in Journal of Intellectual Capital, Vol. 11, No. 1, pp. 39-60.
96. Zou, X., Huan, T. (2011), "A study of the intellectual capital's impact on listed banks' performance in China" in African Journal of Business Management, Vol. 5, No. 12, pp. 5001-5009.