Intellectual capital, bank longevity, and size: Pathways to sustainable growth in Saudi banking through competitive advantage

This study aims to investigate the role of Intellectual Capital (IC), Sustainable Competitive Advantage (SCA), Duration Since Firm Establishment (DSE), and Bank Size (S) in fostering Sustainable Growth (SG) in Saudi Arabia’s banking sector. Data were collected from 2012 to 2022 from 10 commercial banks operating in the Saudi Arabian economy and listed on the Saudi Stock Exchange (Tadawul). The research employs Partial Least Squares Structural Equation Modeling (PLS-SEM) to analyze these relationships. Findings indicate that IC significantly enhances SCA (β = 0.639, p < 0.001), which robustly promotes SG (β = 0.473, p < 0.001). Additionally, a significant direct effect of IC on SG was observed (β = 0.674, p < 0.001). A significant relationship is also observed between DSE and SG (β = 0.956, p < 0.001), highlighting the advantage of longstanding establishments in leveraging accumulated resources for growth. However, the anticipated mediating role of IC in the relationship between DSE and SG was not supported statistically (p = 0.075), suggesting the potential for other variables to influence this dynamic relation. The study underscores the pivotal role of intellectual resources in driving competitive advantages and growth sustainability in the banking industry, particularly within the rapidly evolving economic landscape of Saudi Arabia. These findings offer valuable insights for policymakers and banking institutions looking to leverage intellectual assets and competitive positioning for long-term success.