INTELLECTUAL CAPITAL AND ITS INFLUENCE ON FINANCIAL STABILITY: MODERATING ROLE OF GENDER DIVERSITY

Abstract

Financial stability is a key objective of the banking sector as it ensures sustainable performance and resilience against financial shocks. In knowledge-based economies, intellectual capital has emerged as a strategic resource that can enhance financial stability. While limited studies have examined the moderating effect in the Saudi Arabia context between the intellectual capital and financial stability relationship. In this regard, the study examines the impact of intellectual capital on the financial stability of Saudi banks. In addition, the study also investigated the moderating role of gender diversity. Longitudinal quantitative data were collected from annual reports of the banking sector for the period of 2015 to 2025, where data were analyzed using static panel data. The study results showed that intellectual capital efficiency and capital employed efficiency significantly positively impact financial stability. Further results indicated that gender diversity significantly strengthens the relationship between intellectual capital efficiency and financial stability, which is highlighting the importance of inclusive governance practices. Study results have significant contributions through extending the intellectual capital literature with the moderating effect of gender diversity in the financial stability framework. Practically, the findings suggested that Saudi banks should invest in intellectual capital development and promote gender diversity in leadership positions to enhance financial resilience. The study also provides policy implications through emphasizing knowledge development and workforce diversity to achieve sustainable financial sector growth.