The analysis of intellectual capital and average growth on the performance of Sharia banks

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Abstract

The swift growth of Indonesian Sharia banks in recent decades has necessitated ongoing performance enhancements to establish effective and robust Sharia banking. The study looks into the relationship between average growth of intellectual capital growth (ROGIC) and intellectual capital (IC) and how it affects the operations of Sharia banks using Indonesia’s Islamic performance index (IPI). The profit-sharing ratio (PSR) is used in this study as a stand-in for the Islamic performance index. From 2018 to 2022, the study used a purposive selection technique using 10 Sharia banks. Bank performance is significantly impacted by the average growth of intellectual capital, and Sharia bank performance is significantly impacted by intellectual capital as measured by the Islamic performance index and the PSR, according to research employing multiple regression analysis techniques. An intangible asset that is essential to increasing competitiveness and providing value is an organization’s intellectual capital because of the positive correlation between the Islamic performance index. Additionally, when the value of the Islamic performance index rises in parallel with the average development of intellectual capital, Sharia bank performance improves.

Keywords: Intellectual Capital, Islamic Performance Index, Average Growth of Intellectual Capital, ROGIC

Authors’ individual contribution: Conceptualization — W.M., R.D.L., and I.S.; Methodology — R.D.L. and I.S.; Investigation — W.M. and I.S.; Resources — R.D.L.; Writing — Original Draft — W.M., R.D.L., & I.S.; Writing — Review & Editing — R.D.L. and I.S.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: A1, G2, O4

Received: 27.02.2024
Accepted: 12.12.2024
Published online: 17.12.2024

How to cite this paper: Mawardi, W., Laksana, R. D., & Shaferi, I. (2024). The analysis of intellectual capital and average growth on the performance of Sharia banks. Risk Governance and Control: Financial Markets & Institutions, 14(4), 149–157. https://doi.org/10.22495/rgcv14i4p14