Intellectual capital and performance within the banking sector of Luxembourg and Belgium

Mention, A-L and Bontis, N 2013, 'Intellectual capital and performance within the banking sector of Luxembourg and Belgium', Journal of Intellectual Capital, vol. 14, no. 2, pp. 286-309.


Document type: Journal Article
Collection: Journal Articles

Title Intellectual capital and performance within the banking sector of Luxembourg and Belgium
Author(s) Mention, A-L
Bontis, N
Year 2013
Journal name Journal of Intellectual Capital
Volume number 14
Issue number 2
Start page 286
End page 309
Total pages 24
Publisher Emerald
Abstract Intellectual capital is widely acknowledged as the most critical resource of modern organizations. Nevertheless, empirical evidence on its actual contribution to the dynamics of the value creation process remains scarce, especially within certain sectors and geographic regions. The purpose of this paper is to address this gap by investigating the effects of intellectual capital and its components on business performance in banking institutions within Luxembourg and Belgium. Design/methodology/approach: This empirical research is conducted using a dedicated survey instrument administered to over 200 banks. Data analysis is achieved through structural equation modeling. Findings: Results indicate that human capital contributes both directly and indirectly to business performance in the banking sector. Structural and relational capital are positively related to business performance, though results are not statistically significant. Surprisingly, relational capital has been evidenced to negatively moderate the effect of structural capital on performance. Research limitations/implications: Traditional limitations of a cross-sectional study apply with respect to the attribution of causality and the time lag effects. Practical implications: A set of reliable items to capture intellectual capital has been identified and represents actionable knowledge for implementing an intellectual capital dashboard in banks. The dominant role of human capital also provides insight to managers with respect to business performance levers. Originality/value: Disentangling the effects of intellectual capital on business performance is of the utmost importance in service firms, as they are heavily reliant on intangible resources and capabilities. This research contributes to develop current understanding of these effects. Moreover, interaction effects between human, structural and relational capital have also been uncovered, thus extending prior knowledge on these complex relationships.
Subject Innovation and Technology Management
Keyword(s) Banking
Belgium
Business performance
Innovation
Intellectual capital
Luxembourg
Services
DOI - identifier 10.1108/14691931311323896
Copyright notice © Emerald Group Publishing Limited 2013
ISSN 1469-1930
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