Impacto of Intellectual Capital on Financial Performance of Microfinance Institutions in Ecuador

Authors

DOI:

https://doi.org/10.31637/epsir-2025-1588

Keywords:

Intellectual capital, human capital, structural capital, relational capital, employed capital, M-VAIC, MFIs, financial performance

Abstract

Introduction: This study analyzes the influence of intellectual capital (IC) on the financial performance of 25 microfinance institutions (IMFs) in Ecuador during the period 2016 to 2023, using the M-VAIC model to evaluate IC and its components: human capital (HCE), structural capital (SCE), relational capital (RCE) and employed capital (CEE). Methodology: included panel data analysis and dynamic GMM models to determine the correlations between IC, and ROA and ROE. Results: indicate that IC as a whole is positively correlated with ROA and ROE in static models, with HCE as the main driver of financial performance, followed by SCE. However, RCE shows a negative correlation with profitability ratios in dynamic models, while CEE does not present any significant relationship. Discussions: The importance of investing in personnel training and development (HCE) and optimizing internal processes (SCE) to improve IMFs probability is emphasized, and it is recommended to revaluate strategies related to RCE to avoid negative impacts. Conclusions: This study contributes to the knowledge of IC management in IMFs and suggests future guidelines for research and practice.

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Author Biographies

Miguel Peñarreta Quezada, Universidad Técnica Particular de Loja

Professor and researcher at the Universidad Técnica Particular de Loja (UTPL). With a solid background in economics and finance, he specializes in intellectual capital management and its impact on the financial performance of organizations, especially in emerging economies. He has led and collaborated in several research projects focused on the institutions of the banking industry in Ecuador.

Nelson Chavez Alvear, Universidad Técnica Particular de Loja

Professor and researcher at the Universidad Técnica Particular de Loja (UTPL). He has a strong background in corporate finance and his lines of research have focused on the valuation of companies in emerging economies. He has participated in several research projects focused on capital structure, risk and financial performance.

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Published

2025-02-17

How to Cite

Peñarreta Quezada, M., & Chavez Alvear, N. (2025). Impacto of Intellectual Capital on Financial Performance of Microfinance Institutions in Ecuador. European Public & Social Innovation Review, 10, 1–18. https://doi.org/10.31637/epsir-2025-1588

Issue

Section

Innovation from the New Socio-Economic Contract of the 21st Century