INTELLECTUAL CAPITAL IMPACT ON VALUE CREATION IN BANK INDUSTRY

The source of economic value is no longer the production of material goods, but the creation of the intellectual capital. Intellectual capital is recognized as the foundation of individual, organizational and national competitiveness in the twenty-first century [5]. Intellectual capital includes human capital and structural capital implicated in customers, processes, databases, brands and systems [12]. Moreover it is quite vital to admit that intellectual capital plays an increasingly important role in creating corporate sustainable competitive advantages [18]. Financial institutions and those in bank sector as well have experienced a dynamic, competitive environment and now are facing the challenges of turbulent financial environment. Pulic provided a Value Added Intellectual Coefficient (VAIC)-a measure of efficiency of value added by corporate ability [26]. There is no doubt that bank industry is one of the most knowledge-intensive industry that's why it is quite important to investigate in the framework of the paper the relationship between intellectual capital components and organization performance or in other words the purpose of the paper is to analyze the interaction among value creation efficiency and organizations' financial performance.