TECHNOLOGICAL INNOVATION AND HUMAN CAPITAL: UNVEILING ITS ROLE IN ENHANCING ISLAMIC BANK PERFORMANCE
Abstract
This study aims to examine how technological capital affects financial performance and investigate the moderating role of human capital efficiency in this relationship. This study is analyzed using panel data estimation techniques obtained from the financial statements of Islamic banks in Indonesia for 2013-2024. We also performed a robustness check using alternative control variable. The results indicate that technological capital does not significantly enhance the performance of Islamic banks. In the moderating relationship, human capital efficiency moderates the relationship between technological capital and financial performance. Islamic banks should focus on optimizing the use of technological innovations to provide easier public access to services. Furthermore, Islamic banks must position their human resources as the driving force, ensuring that the adaptation, development, and implementation of technology remain in line with sharia principles.
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Akkas, E., & Asutay, M. (2022). Intellectual capital disclosure and financial performance nexus in Islamic and conventional banks in the GCC countries. International Journal of Islamic and Middle Eastern Finance and Management, 15(5), 943–966. https://doi.org/10.1108/IMEFM-01-2021-0015
Akkas, E., & Asutay, M. (2023). The impact of intellectual capital formation and knowledge economy on banking performance: a case study of GCC’s conventional and Islamic banks. Journal of Financial Reporting and Accounting, 21(5), 1149–1170. https://doi.org/10.1108/JFRA-08-2021-0251
Asutay, M., & Ubaidillah, U. (2024). Examining the Impact of Intellectual Capital Performance on Financial Performance in Islamic Banks. Journal of the Knowledge Economy, 15(1), 1231–1263. https://doi.org/10.1007/s13132-023-01114-1
Barney, J. (1991). Firm Reources ad Sustained Competitive Advantege. Journal of Management, 17(1), 99–120.
Bayraktaroglu, A. E., Calisir, F., & Baskak, M. (2019). Intellectual capital and firm performance: an extended VAIC model. Journal of Intellectual Capital, 20(3), 406–425. https://doi.org/10.1108/JIC-12-2017-0184
Bontis, N. (1998). Intellectual capital: an exploratory study that develops measures and models. Management Decision, 36(2), 63–76. https://doi.org/http://dx.doi.org/10.1108/002 51749810204142
Buallay, A. (2019). Intellectual capital and performance of Islamic and conventional banking: Empirical evidence from Gulf Cooperative Council countries. Journal of Management Development, 38(7), 518–537. https://doi.org/10.1108/JMD-01-2019-0020
Effendi, J., Qoyum, A., Wardhana, L. I., & Thaker, H. M. T. (2023). IT investment and Islamic banking performance in Indonesia: Do Sukuk issuance and Sariah governance matter? Banks and Bank Systems, 18(2), 75–87. https://doi.org/10.21511/bbs.18(2).2023.07
Farooque, O. Al, AlObaid, R. O. H., & Khan, A. K. (2023). Does intellectual capital in Islamic banks outperform conventional banks? Evidence from GCC countries. Asian Review of Accounting, 31(5), 805–831. https://doi.org/10.1108/ARA-12-2022-0298
Gyau, E. B., Appiah, M., Gyamfi, B. A., Achie, T., & Naeem, M. A. (2024). Transforming banking: Examining the role of AI technology innovation in boosting banks financial performance. International Review of Financial Analysis, 96, 1–13. https://doi.org/10.1016/j.irfa.2024.103700
Hasibuan, R. A. S., & Oktaviana, U. K. (2023). Technological Innovation in Influence the Financial Performance of Sharia Banking In Indonesia. Jurnal Ilmiah Ekonomi Islam, 9(1), 283–291. http://dx.doi.org/10.29040/jiei.v9i1.8147
Kamukama, N., Ahiauzu, A., & Ntayi, J. M. (2011). Competitive advantage: Mediator of intellectual capital and performance. Journal of Intellectual Capital, 12(1), 152–164. https://doi.org/10.1108/14691931111097953
Lee, J. W., & Manorungrueangrat, P. (2019). Regression Analysis with Dummy Variables: Innovation and Firm Performance in the Tourism Industry. In Quantitative Tourism Research in Asia (pp. 113–130). Springer Nature. https://doi.org/10.1007/978-981-13-2463-5_6
Lu, X., & White, H. (2014). Robustness checks and robustness tests in applied economics. Journal of Econometrics, 178(1), 194–206. https://doi.org/10.1016/j.jeconom.2013.08.016
Modjo, M. I., Putridamni, F., & Lin, A. S. (2025). Weathering the Storm: Shariah Compliance, Digital Innovation, and Stock Performance During Covid-19. Journal of Islamic Monetary Economics and Finance, 11(2), 385–418. https://doi.org/10.21098/jimf.v11i2.2437
Mohamed, H. A., & Otake, T. (2025). The role of Islamic FinTech in digital financial inclusion and sustainable development post covid-19: cross-country analysis. International Journal of Islamic and Middle Eastern Finance and Management, 18(3), 649–671. https://doi.org/10.1108/IMEFM-02-2024-0100
Mondal, A., Mukherjee, S., & Basak, R. (2022). Are Islamic banks intellectually efficient? Empirical evidence from Bangladesh. International Journal of Learning and Intellectual Capital, 19(3), 236–256. https://doi.org/10.1504/IJLIC.2022.122589
Naser, H., Sultanova, G., & Nahar, S. (2024). The Impact of Fintech Innovation on Bank’s Performance: Evidence from the Kingdom of Bahrain. International Journal of Economics and Financial Issues, 14(1), 136–143. https://doi.org/10.32479/ijefi.15512
Nawaz, T. (2016). Determinants of sustainable growth: A comparative analysis of conventional and islamic banks. Corporate Ownership and Control, 14(1), 403–413. https://doi.org/10.22495/cocv14i1c3p1
Nawaz, T. (2019). Intellectual capital profiles and financial performance of Islamic banks in the UK. International Journal of Learning and Intellectual Capital, 16(1), 87–97. https://doi.org/10.1504/ijlic.2018.10017001
Nawaz, T., & Haniffa, R. (2017). Determinants of financial performance of Islamic banks: an intellectual capital perspective. Journal of Islamic Accounting and Business Research, 8(2), 130–142. https://doi.org/10.1108/JIABR-06-2016-0071
Nazari, J. A., & Herremans, I. M. (2007). Extended VAIC model: measuring intellectual capital components. Journal of Intellectual Capital, 8(4), 595–609. https://doi.org/10.1108/14691930710830774
Ousama, A. A., & Fatima, A. H. (2015). Intellectual capital and financial performance of Islamic banks. International Journal of Learning and Intellectual Capital, 12(1), 1–15. https://doi.org/10.1504/IJLIC.2015.067822
Prasojo, P., Yadiati, W., Fitrijanti, T., & Sueb, M. (2023). Exploring the relationship between intellectual capital and maqasid sharia-based performance: the moderating role of sharia governance. Journal of Islamic Marketing, 14(8), 2130–2146. https://doi.org/10.1108/JIMA-07-2021-0226
Pulic, A. (2004). Intellectual capital-does it create or destroy value? Measuring Business Excellence, 8(1), 62–68. https://doi.org/10.1108/13683040410524757
Saruchi, S. A., Zamil, N. A. M., Basiruddin, R., Rasid, S. Z. A., & Ahmad, N. F. G. (2019). Empirical linkage of intellectual capital and performance of Islamic banks. International Journal of Engineering and Advanced Technology, 8(5), 677–684. https://doi.org/10.35940/ijeat.E1095.0585C19
Wang, X., Sadiq, R., Khan, T. M., & Wang, R. (2021). Industry 4.0 and intellectual capital in the age of FinTech. Technological Forecasting and Social Change, 166(February), 120598. https://doi.org/10.1016/j.techfore.2021.120598
Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal, 5(2), 171–180. https://doi.org/10.1177/105649269500400402
Wijayanti, R., & Setiawan, D. (2022). Social Reporting by Islamic Banks: The Role of Sharia Supervisory Board and the Effect on Firm Performance. Sustainability, 14, 1–25.
Zafar, M. B., & Jafar, A. (2024). Human capital and Islamic banking: a systematic literature review. Journal of Islamic Accounting and Business Research. https://doi.org/10.1108/JIABR-11-2023-0376
Zakiy, F. S., & Falikhatun, F. (2024). The role of intellectual capital on zakat performance: insight from Indonesia. Journal of Intellectual Capital, 25(5/6), 1006–1025. https://doi.org/10.1108/JIC-12-2023-0280
Published
2025-10-15
How to Cite
ZAKIY, Faris Shalahuddin et al.
TECHNOLOGICAL INNOVATION AND HUMAN CAPITAL: UNVEILING ITS ROLE IN ENHANCING ISLAMIC BANK PERFORMANCE.
Proceedings of the International Conference of Islamic Economics and Business (ICONIES), [S.l.], v. 11, n. 1, p. 475-484, oct. 2025.
ISSN 2541-3333.
Available at: <https://conferences.uin-malang.ac.id/index.php/iconies/article/view/3393>. Date accessed: 12 may 2026.
Section
Articles
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