Definitions and sources of variables
| Variables | Notation | Definition of variables | References |
|---|---|---|---|
| Dependent variable | |||
| Performance | ROA | Return on assets, i.e. net income/total assets | Zeitun & Gang Tian (2007) |
| Independent variable | |||
| Intellectual capital | VAIC | Value-added intellectual coefficient (VAIC = capital employed efficiency + human capital efficiency + structural capital efficiency) | Pulic (1998, 2000) |
| Components of the independent variable | |||
| Capital employed efficiency | CEE | The percentage of value-added over capital employed (value added = output – input; where output indicates total interest revenue earned by a bank in a year and input indicates interest paid on deposits and borrowings plus total operating expenses except personnel expenses incurred by a bank in a year and capital employed refers to book value of assets) | Pulic (1998, 2000) |
| Human capital efficiency | HCE | The percentage of value-added over human capital (human capital refers to the personnel expenses) | Pulic (1998, 2000) |
| Structural capital efficiency | SCE | The percentage of structural capital over value-added (structural capital = VA – HC; where VA refers to value-added and HC indicates to human capital) | Pulic (1998, 2000) |
| Bank-specific control variables | |||
| Capital | CAR | Capital adequacy ratio, i.e. regulatory capital/risk-weighted assets | Soedarmono & Tarazi (2016) |
| Bank size | BS | Natural logarithm of total assets | Dong, Meng, Firth, & Hou (2014) |
| Credit risk | NPLTL | Non-performing loans/total loans | Agoraki, Delis, & Pasiouras (2011) |
| Cost inefficiency | CINEFF | Total cost/total income | Rahman, Hamid, & Khan (2015) |
| Income diversification | IDIV | Non-interest income/total income | Jiang, Tang, Law, & Sze (2003) |
| Leverage | LEV | Total liabilities/total assets | Akter, Majumder, & Uddin (2018) |
| Macroeconomic control variables | |||
| Gross domestic product | GDP | Annual GDP growth rate (%) | Majumder & Li (2018), Majumder & Uddin (2017) |
| Inflation | INF | Inflation, GDP deflator (annual %) | Tan (2016) |
| Variables | Notation | Definition of variables | References |
|---|---|---|---|
| Performance | ROA | Return on assets, i.e. net income/total assets | |
| Intellectual capital | VAIC | Value-added intellectual coefficient (VAIC = capital employed efficiency + human capital efficiency + structural capital efficiency) | |
| Capital | CAR | Capital adequacy ratio, i.e. regulatory capital/risk-weighted assets | |
| Bank size | BS | Natural logarithm of total assets | |
| Credit risk | NPLTL | Non-performing loans/total loans | |
| Cost inefficiency | CINEFF | Total cost/total income | |
| Income diversification | IDIV | Non-interest income/total income | |
| Leverage | LEV | Total liabilities/total assets | |
| Gross domestic product | GDP | Annual GDP growth rate (%) | |
| Inflation | INF | Inflation, GDP deflator (annual %) | |
Source(s): Table created by authors
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