Corporate governance vs management of the intellectual capital of banks: Structural equation modeling (SEM)

Smuda-Kocoń, Marlena

doi:10.2478/ijme-2019-0022

Abstract

Objective

The aim of this paper is to identify basic relationships between intellectual capital efficiency in banks, their corporate governance, and their financial performance. Examining these relationships seems justified as up to now the topic has been investigated relatively rarely.

Methods

Structural Equation Modeling was used to accomplish the research objective. The structure of the research tool and the subject matter analysed in the study were drawn from reviews of the subject literature. Quarterly data for the years 2007–2017 published in reports and financial statements of banks listed on the Warsaw Stock Exchange formed the basis for the analysis.

Findings

The results of the conducted analysis do sustain the postulated hypothesis that corporate governance and intellectual capital of banks listed on the Warsaw Stock Exchange have a concurrent, positive impact on financial performance At the same time the relationship between intellectual capital efficiency and (selected features of) corporate governance turned out to be ambiguous and statistically insignificant.

Practical implication

The proposed model of structural equations may be used to identify the relationship in question, or its lack, in other areas of organisational activity. Furthermore, the study results provide guidelines for executives with respect to intellectual capital management and corporate governance.

Originality/value

SEM is a new, original proposal for measurement and presentation of the relationship between intellectual capital efficiency in banks, their corporate governance, and their financial performance.

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