Abstract
This chapter examines the critical role of intellectual capital (IC) in ensuring the long-term financial sustainability of Islamic banks in Pakistan. Utilizing the modified value-added intellectual coefficient (MVAIC) model, the study assesses the impact of IC on financial performance indicators, specifically return on assets (ROA) and return on equity (ROE), using data collected from annual reports spanning 2018 to 2022. The findings demonstrate that MVAIC has a significant and positive effect on financial sustainability, with the strongest influence observed on ROA. Among the components of MVAIC, capital employed efficiency (CEE) emerges as the most impactful, while structural capital efficiency (SCE) and relational capital efficiency (RCE) exhibit partial significance. Notably, human capital efficiency (HCE) shows a significant negative relationship with ROE. This research provides valuable insights for regulators and management, emphasizing the importance of developing and maintaining IC to enhance resilience and promote sustainable growth within the Islamic banking sector.
| Original language | English |
|---|---|
| Title of host publication | Knowledge Creation and Sharing for Social and Economic Development |
| Publisher | IGI Global |
| Pages | 1-20 |
| Number of pages | 20 |
| ISBN (Electronic) | 9798337323640 |
| ISBN (Print) | 9798337323626 |
| DOIs | |
| State | Published - 29 Aug 2025 |
| Externally published | Yes |
Bibliographical note
Publisher Copyright:© 2026, IGI Global Scientific Publishing.
ASJC Scopus subject areas
- General Economics, Econometrics and Finance
- General Business, Management and Accounting
- General Social Sciences