The Influence of Human, Structural, and Relational Capital on Financial Performance in Vietnamese Commercial Banks

Abstract

The proposed research is based on the idea of IC and its influence on the financial performance of Vietnamese commercial banks in 2016-2023. The significance of intangible assets in the process of maximizing profitability and operational efficiency in a bank requires a study in light of the rapid changes occurring in the financial sector, particularly due to the Fourth Industrial Revolution. Using the Modified Value-Added Intellectual Coefficient (MVAIC) model, the Human Capital Efficiency (HCE), the Structural Capital Efficiency (SCE), the Relational Capital Efficiency (RCE), and the Financial Capital Efficiency (FCE) were measured. Return on Assets (ROA) was the key indicator of financial performance. As a secondary source, the research used audited financial reports of 21 commercial banks in Vietnam using a regression analysis based on Pooled Ordinary Least Squares (OLS), Fixed Effects Model (FEM), and Random Effects Model (REM). The Generalized Least Squares (GLS) approach was used to eliminate possible limitations of the model. Findings indicate that there exists a very strong positive correlation between HCE, CEE, and ROA (r=0.6688, r=0.6582, and r=0.6582, respectively). However, SCE and RCE did not have a notable effect on financial results. Based on the findings, financial success in the Vietnamese banking industry is facilitated by structural and relational capital, whereas financial and human capital are much more significant. The research states that a bank can increase its profits and market value through investment in human and financial resources. Further studies could also be used to study the effect of relational capital, regulatory changes, and macroeconomic variables to give a more comprehensive picture of the relationship between IC and financial performance.