Proceedings of the 3rd European Conference on Intellectual Capital

Magdi El-Bannany
intellectually more homogeneous than staff in o<strong>the</strong>r sectors as argued by Kubo and Saka (2002).
Hence, <strong>the</strong> UAE Banks as shown in table 1 has been chosen for <strong>the</strong> present study because <strong>of</strong> it
suitability and hoping that <strong>the</strong> result <strong>of</strong> this study will help <strong>the</strong> UAE banking regulators in addressing
<strong>the</strong> factors affecting intellectual capital performance to take actions towards developing <strong>the</strong>ir
performance and in turn maximise <strong>the</strong>ir wealth creation.
The remainder <strong>of</strong> this paper is structured as follows: Second section discusses <strong>the</strong> definition and
measurement <strong>of</strong> intellectual capital performance, third section explain <strong>the</strong> factors affecting intellectual
capital performance, fourth section covers <strong>the</strong> research method used, fifth section presents <strong>the</strong>
empirical results, and sixth section provides <strong>the</strong> conclusions.
Table 1: The sample <strong>of</strong> banks in <strong>the</strong> study
Banks Names and Abbreviations
Abu Dhabi Commercial Bank (ADCB)
Abu Dhabi Islamic Bank (ADIB)
Bank <strong>of</strong> Sharjah (BOS)
Commercial Bank <strong>of</strong> Dubai (CBD)
Commercial Bank International (CBI)
Dubai Bank (DB)
Dubai Islamic Bank (DIB)
Emirates Islamic Bank (EIB)
First Gulf Bank (FGB)
Invest Bank (IB)
Mashreq Bank (MB)
National Bank <strong>of</strong> Abu Dhabi (NBAD)
National Bank <strong>of</strong> Umm Al Qaiwain (NBQ)
National Bank <strong>of</strong> Ras Al-Khaimah (RAKB)
Sharjah Islamic Bank (SIB)
Union National Bank (UNB)
2. Definition and measurement <strong>of</strong> Intellectual capital performance
Several components about intellectual capital have been argued in <strong>the</strong> literature and some <strong>of</strong> <strong>the</strong>se
are:
A hidden assets represented by knowledge <strong>of</strong> employees, customer and supplier
relations, brand loyalty, market position and knowledge (Roos and Roos, 1997).
An intangible asset with <strong>the</strong> ability to add value for <strong>the</strong> company and <strong>the</strong> society
(Mavridis, 2005).
“<strong>the</strong> knowledge, information, intellectual property and experience that can be put to use
to create wealth” (Martinez and Garcia-Meca, 2005, p.305).
“encompasses intangibles such as patents, intellectual property rights, copyrights and
franchises” (Brennan,2001, p.423).
“information, knowledge applied to work to create value” (Edvinsson and Malone, 1997,
p.3).
“broad organisational knowledge unique to a firm, which allows it constantly to adapt to
changing conditions” (Mouritsen, 1998, p.462).
“given to <strong>the</strong> combined intangible assets which enable <strong>the</strong> company to function”
(Brooking, 1996, p.12).
So, intellectual capital is invisible powers which include internal power, external power. The internal
power represented mainly by employees’ knowledge, and external power reflected in characteristics
such as customers relations, brand loyalty and market position and <strong>the</strong>se powers can help <strong>the</strong>
companies to maximize <strong>the</strong>ir wealth.
Roos and Roos (1997, p.415) stated that ‘although <strong>the</strong> stock market is showing us that intellectual
capital is far more important than money and o<strong>the</strong>r traditional assets-a fact that is consistent with <strong>the</strong>
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