The impact of intellectual capital on bank performance during and after the NPLs crisis: Evidence from Italian banks

The purpose of this paper is to investigate the impact of intellectual capital (IC) efficiency on the financial performance of Italian banks within and after the non-performing loans (NPLs) crisis. The VAIC approach is employed to measure IC efficiency. Several fixed-effects regression models have been estimated to examine the relationship between IC, its components and Italian banks financial performance for a seven-year span (2012-2018), including the period within (2012-2015) and after (2016-2018) the NPLs financial crisis. The paper reveals that IC efficiency positively influences Italian banks financial performance irrespective of NPLs crisis. In particular, it seems that the value creation ability of Italian banks is widely attributed to an appropriate combination and management of both human capital and capital employed efficiency. This is the first study that empirically assesses the impact of IC on the financial performance of Italian banks both within and after the NPLs crisis.