The Relationship between Intellectual Capital and Non-Performing Loans of Banks Listed on the Tehran Stock Exchange

Abstract

Investor decisions in the capital market are influenced by a combination of financial and non-financial information. However, the reports that companies release in the capital market often focus on financial aspects and provide little information regarding intangible items. Therefore, in addition to conventional financial information, investors need more data about intangible factors that affect stock prices. Intellectual Capital (IC)  is one of these intangible factors. The main objective of this study is to examine the relationship between IC and the asset quality of banks listed in the Tehran capital market. For this purpose, data from banks over a 19-year period (2004–2022) were analyzed, and 14 banks were selected. To test the research hypotheses, a multivariate regression approach based on the asymmetric panel data analysis method was employed using EViews software. The results indicate a significant relationship between IC (i.e., banks’ value-added coefficient) and non-performing loans. Furthermore, both human capital efficiency and employed capital efficiency are positively and significantly related to banks’ non-performing loans.