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Intellectual Capital and Firm's Performance: An Empirical Evidence from Islamic Bank in Indonesia

Abstract

The growth of Islamic banking cannot be separated from the Intellectual Capital (IC) of its resources, not only from tangible assets but, also from intangible assets derived from Human Capital (HC), Structural Capital (SC) and Relational Capital (RC)/Customer Capital that will form the Intellectual Capital. This study aims to analyse the IC development model to increase the performance of Islamic banking in Indonesia. The data was collected from the director of Islamic banking in Indonesia, with data collected from as many as 120 respondents. The hypothesis was tested by using Structural Equation Modeling (SEM) together with the Amos program. The empirical results reveal that the IC component has a positive and significant effect on the performance of Islamic banking in Indonesia. A relationship exists between the two elements of the IC component, specifically Human Capital (HC) and Relational Capital (RC) in relation to the performance of Islamic banking, while Structural Capital (SC) has no influence on Islamic banking performance. Furthermore, HC has a higher impact on Islamic banking performance compared with RC.

Muthia Roza Linda, Rosyeni Rasyid and Megawati

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