Intellectual Capital and Financial Performance: An Empirical Investigation Between Islamic and Conventional Banks in GCC Countries

With the ascendancy of the knowledge-based economy in the twenty-first century, intellectual capital (IC) has become recognised in the recent literature as a vital source in creating and maintaining firms’ competitive advantage and shareholder value. This is particularly relevant to knowledge-based firms in the banking sector. IC is an intangible capital and resource that positively contributes to the financial performance of a firm. Efficient and effective management of IC resources will determine the winners and losers in global business in the twenty-first century and beyond. The purpose of this dissertation is to explore the association between IC and the financial performance of Islamic and conventional listed banks in the Gulf Cooperation Council (GCC) countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) from a comparative perspective. The GCC countries are the most dynamic and vibrant economies in the Middle East and North Africa (MENA), where the banking sector plays a central role in economic growth and is the key driver of nonoil and gas-based gross domestic product (GDP) growth. The GCC countries have some common economic, laws, cultural and political aspects; therefore, a comparative analysis can be conducted between the Islamic and conventional listed banks operating in the GCC countries. This study analyses a sample of 68 GCC listed banks (26 Islamic banks and 42 conventional banks) during the period 2009–2016 to investigate the effect of IC — as measured by the Value Added Intellectual Coefficient (VAICTM) and the Modified Value Added Intellectual Coefficient (M-VAIC) and their individual components — on financial performance, both accounting-based and market-based, after controlling for corporate governance and other macroeconomic aspects. This study relies on the framework provided by the resource-based view (RBV) theory, intellectual capital–based view (ICV) theory, knowledge-based view (KBV) theory, resource dependency (RD) theory and agency theory to develop a set of hypotheses for empirical testing. To examine the relationship between IC and financial performance, and to test the hypotheses, this study uses three econometric methods: an ordinary least squares (OLS) regression and then a panel model generalised least squares (GLS) regression to control for unobserved heterogeneity, followed by a generalised method of moments (GMM) regression to control for endogeneity/causality issues. The findings of the relationship between IC (VAIC and M-VAIC) and the financial performance of the GCC banks, as estimated by the system GMM approach, show that, for the combined sample of Islamic and conventional banks, both VAIC and M-VAIC have a significant effect on the performance measures of banks. In particular, the results reveal that VAIC has a significant positive relation with accounting-based performance measures return on assets (ROA), return on equity (ROE) and return on invested capital (ROIC). In contrast, M-VAIC is significant and positively contributes to all accounting based performance (ROA, ROE, ROIC and earnings per share [EPS]). Neither VAIC nor M-VAIC have a significant relation with the market-based performance measure Tobin’s Q (TQ). With regard to the sample of Islamic banks, the system GMM results show that VAIC and M-VAIC significantly affect Islamic banks’ performance. In particular, the results show that VAIC has a significant positive association with ROE, ROIC, EPS and TQ, whereas M-VAIC has a positive association with ROE and ROIC. In contrast, for the sample of conventional banks, the system GMM results indicate that both VAIC and M-VAIC have a significant positive relationship with ROA, ROE and ROIC, but no relationship with TQ. From a comparative perspective, the results suggest that Islamic banks perform better than conventional banks in terms of VAIC in both accounting- and market-based financial performance measures; however, conventional banks outperform Islamic banks in terms of M-VAIC in accounting-based financial performance measures. For both types of banks in the GCC countries, these findings conclude that there is room for improvement through better utilisation of IC resources in conjunction with a strong corporate governance system to ensure firms’ sustainable existence and competitiveness in the banking sector. This study contributes to the growing body of literature on the relationship between IC and bank performance in an emerging market context — particularly in GCC markets. The results of this study have potential implications for policy-makers, executives, investors and other stakeholders aiming to effectively manage and efficiently exploit IC resources in the GCC countries

Does intellectual capital in Islamic banks outperform conventional banks? Evidence from GCC countries

Purpose – This study explores, first, the performance effect (accounting- and market-based performance) of intellectual capital (IC), measured using the value-added intellectual coefficient (VAIC) and its modified version (MVAIC), on Islamic and conventional listed banks in Gulf Cooperation Council (GCC) countries and, second, whether Islamic banks outperform conventional banks in utilising IC.
 Design/methodology/approach – Using resource-based view theory and literature reviews, regression analyses are conducted on data for the period 2012–2019 on 26 Islamic and 42 conventional banks. For hypothesis testing, the generalised method of moments panel data regression analysis is applied after addressing endogeneity issues.
 Findings – Results, after controlling for corporate governance, indicate that the performance effects of IC (VAIC and MVAIC) on both bank types largely converge and Islamic banks do not outperform conventional banks in IC use. IC has a stronger effect on accounting performance measures for conventional banks than for Islamic banks, but IC has some effect on market performance measures for Islamic banks alone. Corporate governance variables do not play a significant role in the presence of VAIC and MVAIC although there are differences in corporate governance between the two bank types.
 Originality/value – This study bridges the gap in GCC banking sector literature on the association between IC efficiency and performance measures of Islamic and conventional banks, from a comparative perspective. It enhances understanding, about the IC–financial performance nexus, of policymakers, regulators, bank managers and other stakeholders interested in the influence of different business models, financing/investment methods and governance structure on the performance of both bank types

Is body mass index ≥50 kg/m2 a predictor of higher morbidity for patients who have undergone laparoscopic sleeve gastrectomy?

Background: Super-morbid obese (SMO) patients (body mass index [BMI] >50 kg/m2) carry a higher risk for bariatric surgery. Despite several studies addressing this patient group, the number of patients included tends to be relatively small. Methods: We reviewed 708 patients who underwent laparoscopic sleeve gastrectomy between 2009 and 2015 and compared the outcome of SMO (BMI ≥50 kg/m2) patients with MO (BMI <50 kg/m2) patients. Results: Of 708 patients, 217 were SMO and 491 were MO. Both groups had homogeneous baseline characteristics and comorbidities, except sleep apnea which was higher in SMO group. There was no significant difference for the duration of operation, length of stay, or recovery room time. The mean number of trocars was four for both groups. There were no conversions to open or documented intraoperative complications in either group. Postoperative complications occurred in 13 (6%) SMO patients (3 patients with leakage and 10 with bleeding). Postoperative complications occurred in 21 (4.3%) MO patients (11 patients with leakage and 10 with bleeding). No reoperation was done in both groups. There was no surgical mortality. Conclusion: We detected no significant difference in the duration of operation and intra- or postoperative complication between SMO and MO groups. The possibility of the safety of this procedure in SMO group can be adopted

Diabetic patients' awareness of diabetic retinopathy symptoms and complications

Background: Diabetes is a very common chronic endocrinological disease. A total of 8.8% of the adult population worldwide was diabetics. Diabetic retinopathy is a silent disease, early detection and intervention is essential for its management and prognosis. Aim: To assess the diabetic patients' awareness of diabetic retinopathy symptoms and complications. Methods: This is a cross-sectional community-based study which was conducted in Saudi Arabia using a survey from the period between June and September 2018 on all diabetic Saudi participants between 15 and 75 years of age. Results: This study involved 385 participants. The average age of the participants was 47.82 ± 14.49. The study only involved patients who were diagnosed with type 1 diabetes mellites (DM) or 2 DM. And 81% of the samples were diagnosed with type 2 DM. A total of 311 participants were aware of the DM effect on the eye. There was a significant difference between gender regarding the effect of DM on the retina in good control patients. On the subject of the source of participants' knowledge of DM and its complication, there was a notable difference between groups. Conclusion: An acceptable level of knowledgewas noted among patients. However, some points of knowledge should be increased

SARS-CoV-2 vaccination modelling for safe surgery to save lives: data from an international prospective cohort study

Background: Preoperative SARS-CoV-2 vaccination could support safer elective surgery. Vaccine numbers are limited so this study aimed to inform their prioritization by modelling. Methods: The primary outcome was the number needed to vaccinate (NNV) to prevent one COVID-19-related death in 1 year. NNVs were based on postoperative SARS-CoV-2 rates and mortality in an international cohort study (surgical patients), and community SARS-CoV-2 incidence and case fatality data (general population). NNV estimates were stratified by age (18-49, 50-69, 70 or more years) and type of surgery. Best- and worst-case scenarios were used to describe uncertainty. Results: NNVs were more favourable in surgical patients than the general population. The most favourable NNVs were in patients aged 70 years or more needing cancer surgery (351; best case 196, worst case 816) or non-cancer surgery (733; best case 407, worst case 1664). Both exceeded the NNV in the general population (1840; best case 1196, worst case 3066). NNVs for surgical patients remained favourable at a range of SARS-CoV-2 incidence rates in sensitivity analysis modelling. Globally, prioritizing preoperative vaccination of patients needing elective surgery ahead of the general population could prevent an additional 58 687 (best case 115 007, worst case 20 177) COVID-19-related deaths in 1 year. Conclusion: As global roll out of SARS-CoV-2 vaccination proceeds, patients needing elective surgery should be prioritized ahead of the general population