The Impact of Banking Risks on the Creation of the Bank's Knowledge Base: An Econometric Study of Private Traditional Banks Operating in Syria

Abstract

Purpose: This study aims to identify the impact of banking risks on shaping the knowledge base in conventional banks.
Study design/methodology/approach: The study used quarterly panel data, and hypotheses were tested using a random-effects model after confirming its statistical superiority. A bank's knowledge base was expressed through the amount of its intangible assets. As for banking risks, each was described as follows: credit risk (credit risk - weighted assets/total assets), market risk (market risk-weighted assets/total assets), operational risk (operational risk-weighted assets/total assets), liquidity risk (credit facilities/total assets), and insolvency risk (Z-score).
Sample and data: The study was applied to 11 private conventional banks operating in Syria during the period from 2011 Q1 to 2024 Q3.
Results: The results showed a positive impact of the inflation rate, operational risk, and insolvency risk on shaping a bank's knowledge base. Market risk and bank profitability had a negative impact. The study also found no statistically significant impact of credit risk and liquidity risk on shaping a bank's knowledge base.
Originality/value: This study is pioneering and makes a significant contribution through its discussion of how banking risks affect the formation of a knowledge base, due to the lack of previous research on this topic, both conceptually and practically.
Research limitations/implications: This study is limited to conventional private banks operating in Syria, which may limit the possibility of generalizing its results to the entire banking sector. Furthermore, its measurement of a bank's knowledge base
was limited to the intangible assets index.