The impact of business ethics on financial sustainability for banking through intellectual capital

A thesis submitted to the Board of the College of Administration
and Economics, University of Karbala – which is part of the
requirements for obtaining the degree of Doctor of Philosophy in

of Financial and Banking Sciences

By

Zainab Sadoon AL-Robayei
Supervised by

Prof .DR Prof .DR
zainab Mak Albanaa Kamal Kadim Al Shamry

Abstract

This study aimed to identify the role of work ethics and its impact on the financial sustainability of banks through intellectual capital, by raising various questions that would answer the study hypotheses, in addition to clarifying the extent of the contribution of the mediating variable in influencing and contributing to this relationship. The problem was represented in analyzing and interpreting the indicators of work ethics, represented by the following indicators (social security, donations, revenue growth, management quality, management integrity, fines) (as an independent variable) in the indicators of financial sustainability of banks (profitability with its variables return on assets, return on profitability and self-sufficiency through its variable financial self-sufficiency) as (a dependent variable), and this relationship is mediated by intellectual capital with its indicators (human capital, structural capital, capital employed and the added value of intellectual capital). Therefore, the study relied on the practical side on the aforementioned indicators related to each variable of the study variables in order to analyze and interpret it, in addition to using some statistical indicators that are In order to answer and clarify some inquiries, and regarding the data, it was based on the financial data included in the reports and statements published on the official website of the Securities Commission and listed in the regular market of the Iraq Stock Exchange for a sample of private Iraqi banks represented by (Baghdad, Commercial, Mansour, Al-Ahli, Middle East, Sumer, Investment, Gulf, Mosul, Economy) for a time series extending for (9) years from (2015 – 2023), and finally on the statistical side and in order to explain and answer the study hypotheses, the mathematical and statistical models related to the subject were used, including data analysis (Analysis Data Panel), as the three models were applied with the aim of comparing between these models and choosing the appropriate model from among them to show the most appropriate for the variables and indicators of the study sample according to the (Hausman) test using the statistical program (12V.Eviews). The study used structural equation models using the path analysis method (Analysis Path) in order to test the effect of the variables Independent variables with dependent variables through intermediate variables, and knowing the nature of the indirect effect between the variables and testing their significance and stating their overall effect, and through statistical analysis using the program (24. (Amos) in addition to a group of statistical programs (Excel, SPSS). This study reached a set of conclusions, the most important of which is that the results of the study showed that work ethics directly affect the financial sustainability of banks in addition to the direct impact on the added value of intellectual capital, except for the percentage of added value of structural capital. As for the path analysis, it showed the possibility of the indirect impact of work ethics on the financial sustainability of banks through indicators of the added value of intellectual capital. Based on the above, this study recommends that banking institutions should pay attention to the importance of adopting work ethics and integrating them into their programs and strategic plans because this matter contributes to enhancing the confidence of depositors and shareholders in the importance of keeping their money with these banks and thus achieving stability in banking work and improving the profitability of the bank. It is also necessary to pay attention to financial sustainability in order to manage risks and avoid exposure to them as much as possible as a result of unstable economic and political conditions. Financial sustainability provides stability and financial balance that helps management solve the problems they face. Finally, it is necessary to emphasize the development of working cadres to improve the efficiency of management quality in the banks of the study sample because the availability of such cadres contributes to reducing financial crises. Successive financial stumbling blocks and shocks, controlling banking risks, avoiding high operating expenses, and limiting the increase in the provision for doubtful debts.

 Keywords: – Business ethics, financial sustainability, intellectual capital

The impact of business ethics on financial sustainability for banking through intellectual capital

A thesis submitted to the Board of the College of Administration
and Economics, University of Karbala – which is part of the
requirements for obtaining the degree of Doctor of Philosophy in

of Financial and Banking Sciences

By

Zainab Sadoon AL-Robayei
Supervised by

Prof .DR Prof .DR
zainab Mak Albanaa Kamal Kadim Al Shamry

Abstract

This study aimed to identify the role of work ethics and its impact on the financial sustainability of banks through intellectual capital, by raising various questions that would answer the study hypotheses, in addition to clarifying the extent of the contribution of the mediating variable in influencing and contributing to this relationship. The problem was represented in analyzing and interpreting the indicators of work ethics, represented by the following indicators (social security, donations, revenue growth, management quality, management integrity, fines) (as an independent variable) in the indicators of financial sustainability of banks (profitability with its variables return on assets, return on profitability and self-sufficiency through its variable financial self-sufficiency) as (a dependent variable), and this relationship is mediated by intellectual capital with its indicators (human capital, structural capital, capital employed and the added value of intellectual capital). Therefore, the study relied on the practical side on the aforementioned indicators related to each variable of the study variables in order to analyze and interpret it, in addition to using some statistical indicators that are In order to answer and clarify some inquiries, and regarding the data, it was based on the financial data included in the reports and statements published on the official website of the Securities Commission and listed in the regular market of the Iraq Stock Exchange for a sample of private Iraqi banks represented by (Baghdad, Commercial, Mansour, Al-Ahli, Middle East, Sumer, Investment, Gulf, Mosul, Economy) for a time series extending for (9) years from (2015 – 2023), and finally on the statistical side and in order to explain and answer the study hypotheses, the mathematical and statistical models related to the subject were used, including data analysis (Analysis Data Panel), as the three models were applied with the aim of comparing between these models and choosing the appropriate model from among them to show the most appropriate for the variables and indicators of the study sample according to the (Hausman) test using the statistical program (12V.Eviews). The study used structural equation models using the path analysis method (Analysis Path) in order to test the effect of the variables Independent variables with dependent variables through intermediate variables, and knowing the nature of the indirect effect between the variables and testing their significance and stating their overall effect, and through statistical analysis using the program (24. (Amos) in addition to a group of statistical programs (Excel, SPSS). This study reached a set of conclusions, the most important of which is that the results of the study showed that work ethics directly affect the financial sustainability of banks in addition to the direct impact on the added value of intellectual capital, except for the percentage of added value of structural capital. As for the path analysis, it showed the possibility of the indirect impact of work ethics on the financial sustainability of banks through indicators of the added value of intellectual capital. Based on the above, this study recommends that banking institutions should pay attention to the importance of adopting work ethics and integrating them into their programs and strategic plans because this matter contributes to enhancing the confidence of depositors and shareholders in the importance of keeping their money with these banks and thus achieving stability in banking work and improving the profitability of the bank. It is also necessary to pay attention to financial sustainability in order to manage risks and avoid exposure to them as much as possible as a result of unstable economic and political conditions. Financial sustainability provides stability and financial balance that helps management solve the problems they face. Finally, it is necessary to emphasize the development of working cadres to improve the efficiency of management quality in the banks of the study sample because the availability of such cadres contributes to reducing financial crises. Successive financial stumbling blocks and shocks, controlling banking risks, avoiding high operating expenses, and limiting the increase in the provision for doubtful debts.

 Keywords: – Business ethics, financial sustainability, intellectual capital