Knowledge management and value creation in the post-crisis banking system

This paper aims to demonstrate the existence of a relationship between the knowledge creation process and competitive advantage in the banking system. The framework of knowledge creation processes adopted in this research is the spiral of knowledge proposed by Nonaka and Takeuchi (1995). The concept of competitive advantage is limited to the measurement of economic value by adopting methods that compare the financial performance of the banks with related markets. The objective of this research is to answer the following research question: Which factors of the spiral of knowledge are relevant for increasing a bank’s economic value?

The sample used for this empirical research is composed of 960 banks operating in 24 countries. The sample was analyzed from 2012 to 2015 and includes 3,840 observations. Regarding the methodology, hypothesis demonstration was carried out using a panel analysis (generalized least squares regression) on a set of variables.

The results show that Nonaka and Takeushi’s spiral of knowledge has a positive influence on value creation in the banking system. However, not all factors of the four modalities of converting tacit knowledge into explicit knowledge and vice versa have a positive influence on the economic value of banks. Therefore, by excluding factors that have a negative influence or are not significant, it is possible to formulate an empirical model that illustrates the relationship between the spiral of knowledge and the economic value of banks.

There is a lack of studies on the knowledge creation process in the banking system because most of the research is geographically limited, and empirical tests are performed on small samples. Second, generally, these studies are limited to the relationship between intellectual capital and bank performance measured by accounting ratios. However, intellectual capital is only one component of the broader concept of knowledge. This research uses a large and geographically diverse sample and studies the relationship between the spiral of knowledge and economic value, which is measured by various financial techniques.