A Study On Performance Of Chinese Commercial Banks: Based On Intellectual Capital

The 21st century is an era of knowledge economy, during which economic development is beginning to rely on intellectual and physical capital instead of physical capital only. For a business, relying on physical capital such as money, plant or equipment to create value is unsustainable. However, intellectual capital could create value efficiently in a long-term. Banking is a knowledge-intensive industry aims to obtain more profit by transforming knowledge into financial products and services. So intellectual capital of commercial banks always play an essential part in value-creation process. This article will research on the relationship between intellectual capital and bank performance and then analyses the difference between different components of intellectual capital. The article hopes to find a new perspective for performance-evaluation between commercial banks.Firstly the article reviewed previous studies on intellectual capital, bank performance and their relationships and then determines to put both listed and unlisted banks into study in order to having a more reliable result. After the theoretical analysis, I choose VAIC model to evaluate intellectual capital and choose factor analysis method to measure commercial bank’s performance. Furthermore I use panel data to establish tow regression model and trying to find a stable relationship between intellectual capital(including human capital, structural capital and physical capital) and commercial banks’ performance in China. The result shows that intellectual capital plays a significantly positive role in improving bank’s performance. Human capital, structural capital and physical capital could respectively improve bank’s performance while structural capital are more efficiently than physical capita and human capital. Finally, this article put forward some policy recommendations from three parts in improving the performance of Chinese commercial banks.