Relationship between Bank Risk and Intellectual Capital in the GCC Countries: An Empirical Analysis

Chedia Karoui, Wissem Ben Ali


The primary goal of this study is to determine the effect of intellectual capital efficiency (), also known as knowledge capital, and its components, including human capital efficiency () and structural capital efficiency (), on bank risk-taking behavior in GCC countries. This study investigates the impact of intellectual capital (IC) on risk management in the banking sectors of the Gulf Cooperation Council (GCC) countries. The scientific novelty of this research lies in its focus on an underexplored area, as there has been limited previous research on the influence of IC on risk-taking, specifically in the context of GCC countries' banking sectors. By examining the relationship between IC and risk management in this region, this research contributes to the existing body of knowledge in several ways. First, it expands the understanding of how intellectual capital, which encompasses knowledge, expertise, intellectual property, and information, can affect risk management practices within banks. This exploration provides valuable insights into the role of IC as a potential lever for mitigating risks and enhancing the performance of banking institutions. To demonstrate this impact, the study used the generalized method of moment (GMM) estimator, the ordinary least square estimate (to test robustness), and unbalanced panel data from 172 banks in GCC countries, totaling 3268 bank-year observations from 2000 to 2019. Our findings show that  is strongly and positively related to a bank’s credit risk, indicating that credit risk increases as intellectual capital efficiency also increases and both human and structural capital efficiency rise. In addition, bank performance (), , macrovariable inflation, and size have a negative impact on bank risk, whereas has a positive one. Finally, the study’s findings will be useful to stakeholders, policymakers, and academics for future research.


Keywords: intellectual capital, efficiency, risk-taking.

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