Intellectual capital and the creation of value in Latvian banking sector: panel data analysis

Intellectual capital (IC) has proven to be under valuated in many countries over the world. This paper provides some evidence that Latvia is not an exception. Author has used the research methods applied in the research on financial sector by the Malaysian, Finnish and Brazilian scientists to provide a view to the issues of IC in Latvian banking sector. The study is based on applying calculated intangible value (CIV), which measures the monetary value of IC or IC stock, value-added intellectual coefficient (VAIC™), which describes how a company's IC adds value to the company and intellectual capital efficiency (ICE), which measure the flow of IC. This paper presents the results on the analysis of different aspects of IC evaluation, its components and relationships based on the financial statement data collected for all the 24 Latvian banks during the period between 2004 and 2008.