The Impact of Intellectual Capital on Bank Risk: Evidence from Banking Sectors of Bangladesh

Authors

  • Changjun Zheng School of Management, Huazhong University of Science and Technology (HUST) 1037 Luoyu Road, Hongshan District, Wuhan 430074, P.R. China.
  • Md Nazmul Islam School of Management, Huazhong University of Science and Technology (HUST) 1037 Luoyu Road, Hongshan District, Wuhan 430074, P.R. China.Department of Accounting, Mawlana Bhashani Science and Technology University, Santosh, Tangail-1902,Bangladesh https://orcid.org/0000-0003-4628-1330
  • Md Nazmus Sadekin Department of Economics, Mawlana Bhashani Science and Technology University, Santosh, Tangail-1902,Bangladesh https://orcid.org/0000-0002-3784-275X
  • Syed Moudud Ul Huq Department of Accounting, Mawlana Bhashani Science and Technology University, Santosh, Tangail-1902,Bangladesh https://orcid.org/0000-0002-9226-5131

DOI:

https://doi.org/10.20525/ijrbs.v11i4.1777

Keywords:

Bank Performance; Bank Risk; Commercial Bank; Credit Risk; Intellectual capital; Bangladesh.

Abstract

The main purpose of this study is to identify the impact of intellectual capital efficiency (ICE) also known as knowledge capital along with its components human capital efficiency (HCE) and structural capital efficiency (SCE) on bank risk-taking behavior in Bangladesh. To reveal this effect, the study uses generalized method of moment (GMM) estimator and Two Stages Least Square estimator (to check the Robustness) and unbalanced panel data of 32 commercial banks of Bangladesh consisting of 530 bank-year observations during the year 2003-2020. The main results of the study are: (a) ICE is significantly and positively connected with a bank’s credit risk which indicates credit risk grows up with the increase of Intellectual capital efficiency, and (b) Both the human capital efficiency and structural capital efficiency positively impacts credit risk but the impact of SCE is not significant as HCE, (c) Bank performance (ROA), RWATA, macro variable inflation, and size have a negative impact on bank risk whereas ID and GGDP insignificant positively impact on bank’s risk. Finally, the results of the study will assist the stakeholders, policymakers, and academicians for future research.

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Author Biographies

Changjun Zheng, School of Management, Huazhong University of Science and Technology (HUST) 1037 Luoyu Road, Hongshan District, Wuhan 430074, P.R. China.

Dr. Changjun Zheng is a Professor of the Public Administration at Huazhong University of Science and Technology, Wuhan, P.R. China. His prior area of research interest is not limited to Risk Management, Assets Pricing, Capital Management, Financial Economics etc. Dr. Zheng has a number of renowned articles which appear in Economic Modeling, Research in International Business and Finance, Journal of Banking and Finance etc.

Md Nazmul Islam, School of Management, Huazhong University of Science and Technology (HUST) 1037 Luoyu Road, Hongshan District, Wuhan 430074, P.R. China.Department of Accounting, Mawlana Bhashani Science and Technology University, Santosh, Tangail-1902,Bangladesh

Md Nazmul Islam received his MBA & BBA Degrees in the Department of Accounting and Information Systems from University of Rajshahi, Bangladesh. His primary research interest is in Financial Economics, Risk Management, Corporate Taxation, Corporate Governance, Technology and Innovation, etc. His research papers have published in esteemed journals. Besides, he is a regular reviewer of the Journal of Financial Regulation and Compliance, Journal of Economics Finance and Administrative Science, FIIB Business Review etc.

Md Nazmus Sadekin, Department of Economics, Mawlana Bhashani Science and Technology University, Santosh, Tangail-1902,Bangladesh

Dr. Md  Nazmus Sadekin is an Associate Professor and the Chair of the Department of Economics & Dean, Faculty of Social Science at Mawlana Bhashani Science and Technology University (MBSTU), Tangail.He completed his Honours and Masters’ degree from University of Dhaka. He gained his PhD Degree from University of Uttara Malaysia. His primary research interests are Financial Economics, Risk Management, Money market trends, Econometric Modeling,  Technology and Innovation etc.

Syed Moudud Ul Huq, Department of Accounting, Mawlana Bhashani Science and Technology University, Santosh, Tangail-1902,Bangladesh

Dr. Syed Moudud-Ul-Huq is an Associate Professor and the Chair of the Department of Accounting & Dean, Faculty of Business Studies at Mawlana Bhashani Science and Technology University (MBSTU), Tangail. His primary research interests are Financial Economics, Risk Management, Econometric Modeling,  Technology and Innovation etc. He has published over 50 papers in esteemed journals including in International Journal of Emerging Markets, Research in International Business and Finance, International Journal of Islamic and Middle Eastern Finance and Management, Singapore Economic Review, Sustainability-MDPI Journal, Eurasian Economic Review, Journal of Financial Regulation and Compliance, Global Business Review, the Bottom Line etc. Besides, he is a regular reviewer of Bulletin of Economic Research, Economic Research, International Journal of Finance and Economics, Eurasian Economic Review, the Bottom Line, Sage Open, Cogent Economics and Finance etc.

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Published

2022-06-05

How to Cite

Zheng, C. ., Islam, M. N., Sadekin, M. . N. ., & Huq, . S. M. U. (2022). The Impact of Intellectual Capital on Bank Risk: Evidence from Banking Sectors of Bangladesh. International Journal of Research in Business and Social Science (2147- 4478), 11(4), 183–192. https://doi.org/10.20525/ijrbs.v11i4.1777

Issue

Vol. 11 No. 4 (2022): Special Issue in June

Section

Financial and Economic Studies

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Copyright (c) 2022 Changjun Zheng, Md Nazmul Islam, Md Nazmus Sadekin, Syed Moudud Ul Huq

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