How Does Intellectual Capital Fuel Non-Interest Incomes in Banks? New Case from an Emerging Country

  • Chi Huu Lu (Chi Huu Lu is currently the Researcher at the Institute of Scientific Research and Banking Technology, Ho Chi Minh University of Banking) ;
  • Thich Van Nguyen (Thich V. Nguyen is currently Deputy Director of the Institute of Scientific Research and Banking Technology and a lecturer at the Faculty of Business Administration, Ho Chi Minh University of Banking)
  • Published : 2023.06.30


The aim of this study is to answer the straightforward question of whether the implementation of IC has fueled non-interest incomes of banks or not. By utilizing the data of 26 domestic banks in Vietnam and employing the value-added intellectual coefficient model (VAIC) as the measure of IC efficiency, our empirical evidence manifests that IC plays a vital role in fostering non-interest incomes of banks. When dividing VAIC into different components, we find that structure capital employed (SCE) is the most important component to enhance the expansion of these incomes compared with other components including capital employed efficiency (CEE), human capital efficiency (HCE). These findings remain unchanged through some robustness tests performed. While the main driver of IC and SCE, CEE component becomes a substantial advantage to increase non-interest incomes in large banks. Meanwhile, the degree of impact of SCE is higher in small banks compared with large ones. Overall, this study would provide a deep insight into the role of IC in the transformation into non-interest income activities of banks in an emerging country, and therefore our findings would be useful for both scholars and policy-makers in Vietnam, where has undergone the period of major reforms in banking system.



The research topic was supported by The Youth Incubator for Science and Technology Programme, managed by Youth Promotion Science and Technology Center - Ho Chi Minh Communist Youth Union and Department of Science and Technology of Ho Chi Minh City, the contract number is "26/HD-KHCNT-VU" signed on 30th, December 2022. Also, we would like to thank you to Editor and the anonymous reviewers due to their valuable comments to enhance the quality of our study.


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