IMPACT OF INTELLECTUAL CAPITAL ON BANK’S STABILITY WITH MODERATING THE ROLE OF CORPORATE GOVERNANCE

Abstract

The ambition ofthis report is to discuss the inherent factors ofthe banking system as well as the short-term and long-term effects ofintellectual capital efficiency on bank stability in Pakistan. The VAIC model is used to measure the ICE, which is composed ofthree capitals: human, relational, and structural. The findings ofthe statistical panel regression support the hypothesis that higher Intellectual capital efficiency relates to improved bank stability and supports the resource-based theory. Other than that, research also reveals the long-term contribution of intellectual capital efficiency to bank stability. Further, the control variable CG index proxies such as bank measurement, bank age, board composition, and bank size demonstrate a favorable effect on bank Stability. The resource-based strategy can be applied to enhance intangible investments and create a long-lasting competitive advantage. Future assessment is anticipated to take into account the risk management approach to examine the association between IC efficiency and banks' stability.