The Impact of Intellectual Capital on Financial Performance of Nonfinancial Listed Companies in Indonesia Stock Exchange
Abstract
The shift from physical-resource-based economies to knowledge-based economies has caused researchers to look for a new way to measure intangible assets, including intellectual capital. The objective of this research is to examine the impact of Intellectual Capital on a firm’s performance. The method used in this research is A-VAIC (Adjusted Value Added Intellectual Coefficient) which consists of HCE (Human Capital Efficiency), INVCE (Innovation Capital Efficiency), and CEE (Capital Employed Efficiency). The multiple regression analysis is employed to test the hypotheses studied. The sample used in this research is 48 nonfinancial companies listed on Indonesia Stock Exchange from 2010 to 2019. This research found that A-VAIC has a significant positive effect on a firm’s performance. The result shows that Intellectual Capital had positively influenced a firm’s performance. The findings may be used as a reference for the manager to effectively and efficiently manage Intellectual Capital, leading to a better firm’s performance.
References
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Roos, J., Roos, G., Dragonetti, N. C., & Edvinsson, L. (1997). Intellectual Capital Navigating The New Business Landscape. MacMillan Press Ltd.
Sawarjuwono, T., & Kadir, A. P. (2004). Intellectual Capital: Perlakuan, Pengukuran dan Pelaporan (Sebuah Library Research). Jurnal Akuntansi Dan Keuangan, 5(1), 35–57.
Smriti, N. and Das, N. (2018), “The impact of intellectual capital on firm performance: a study of Indian firms listed in COSPI”, Journal of Intellectual Capital, Vol. 19 No. 5, pp. 935-964.
Soewarno, N., & Tjahjadi, B. (2020). Measures that matter: An empirical investigation of intellectual capital and financial performance of banking firms in Indonesia. Journal of Intellectual Capital, 21(6), 1085–1106. https://doi.org/10.1108/JIC-09-2019-0225
Ulum, I., Kharismawati, N., & Syam, D. (2017). Modified value-added intellectual coefficient (MVAIC) and traditional financial performance of Indonesian biggest companies. 13(2), 207–219.
Vishnu, S., & Gupta, K. (2014). Intellectual Capital and Performance of Pharmaceutical Firms in India. Journal of Intellectual Capital, 15, 83–99. https://doi.org/10.1108/JIC-04-2013-0049
Wernerfelt, B. (1984), “A resource-based view of the firm”, Strategic Management Journal, Vol. 5 No. 2, pp. 171-180.
Bayraktaroglu, A. E., Calisir, F., & Baskak, M. (2019). Intellectual capital and firm performance: An extended VAIC model. Journal of Intellectual Capital, 20(3), 406–425. https://doi.org/10.1108/JIC-12-2017-0184
Firer, S. and Williams, S.M. (2003), “Intellectual capital and traditional measures of corporate performance”, Journal of Intellectual Capital, Vol. 4 No. 3, pp. 348-360.
Freeman, R. E., & Reed, D. L. (1983). Stockholders and stakeholders: A new perspective on corporate governance. California Management Review, 25(3), 88–106.
Komnenic, B. and Pokrajcic, D. (2012), “Intellectual capital and corporate performance of MNCs in Serbia”, Journal of Intellectual Capital, Vol. 13 No. 1, pp. 106-119.
Maditinos, D., Chatzoudes, D., Tsairidis, C., & Theriou, G. (2011). The impact of intellectual capital on firms’ market value and financial performance. Journal of Intellectual Capital, 12(1), 132–151. https://doi.org/10.1108/14691931111097944
Maji, S. G., & Goswami, M. (2017). Intellectual capital and firm performance in India: A comparative study between original and modified value added intellectual coefficient model. 14.
Nadeem, M., Dumay, J., & Massaro, M. (2019). If You Can Measure It, You Can Manage It: A Case of Intellectual Capital. Australian Accounting Review, 29(2), 395–407. https://doi.org/10.1111/auar.12227
Nimtrakoon, S. (2015), “The relationship between intellectual capital, firms’ market value and financial performance: empirical evidence from the ASEAN”, Journal of Intellectual Capital, Vol. 16 No. 3, pp. 587-618.
Nugroho, A. (2012). Faktor-Faktor Yang Mempengaruhi Intellectual Capital Disclosure (ICD). Accounting Analysis Journal, 1(2).
Nuryaman. (2015). The Influence of Intellectual Capital on The Firm’s Value with The Financial Performance as Intervening Variable. Procedia - Social and Behavioral Sciences, 211, 292–298. https://doi.org/10.1016/j.sbspro.2015.11.037
Pulic, A. (1998). Measuring the performance of intellectual potential in knowledge economy. in The 2n McMaster World Congress on Measuring and Managing Intellectual Capital, Austria.
Pulic, A., & Kolakovic, M. (2003). Value creation efficiency in the new economy. Global Business and Economics Review, 5(1), 111. https://doi.org/10.1504/GBER.2003.006201
Roos, J., Roos, G., Dragonetti, N. C., & Edvinsson, L. (1997). Intellectual Capital Navigating The New Business Landscape. MacMillan Press Ltd.
Sawarjuwono, T., & Kadir, A. P. (2004). Intellectual Capital: Perlakuan, Pengukuran dan Pelaporan (Sebuah Library Research). Jurnal Akuntansi Dan Keuangan, 5(1), 35–57.
Smriti, N. and Das, N. (2018), “The impact of intellectual capital on firm performance: a study of Indian firms listed in COSPI”, Journal of Intellectual Capital, Vol. 19 No. 5, pp. 935-964.
Soewarno, N., & Tjahjadi, B. (2020). Measures that matter: An empirical investigation of intellectual capital and financial performance of banking firms in Indonesia. Journal of Intellectual Capital, 21(6), 1085–1106. https://doi.org/10.1108/JIC-09-2019-0225
Ulum, I., Kharismawati, N., & Syam, D. (2017). Modified value-added intellectual coefficient (MVAIC) and traditional financial performance of Indonesian biggest companies. 13(2), 207–219.
Vishnu, S., & Gupta, K. (2014). Intellectual Capital and Performance of Pharmaceutical Firms in India. Journal of Intellectual Capital, 15, 83–99. https://doi.org/10.1108/JIC-04-2013-0049
Wernerfelt, B. (1984), “A resource-based view of the firm”, Strategic Management Journal, Vol. 5 No. 2, pp. 171-180.
Published
2021-09-01
How to Cite
HADYAN, Muhammad; MAKALIWE, Willem.
The Impact of Intellectual Capital on Financial Performance of Nonfinancial Listed Companies in Indonesia Stock Exchange.
International Journal of Advanced Research in Economics and Finance, [S.l.], v. 3, n. 3, p. 102-113, sep. 2021.
ISSN 2682-812X.
Available at: <https://myjms.mohe.gov.my/index.php/ijaref/article/view/15090>. Date accessed: 14 oct. 2024.
Section
English Section
