Intellectual capital and firm performance in the Indonesian non-financial firms

Sofian Sofian, S, Patricia Febrina Dwijayanti, Hendra Wijaya

Abstract


This study analyzes the effect of intellectual capital and firm performance in non-financial firms. The firm performance comprises of market performance and financial performance of the firm. This study also breakdown the non-financial firms between three sectors that are the primary sector, manufacturing sector, and service sector. The three sectors are the three main sectors in the economy. This study measures intellectual capital in different ways using the intellectual capital index. The data were analyzed with unbalanced panel data regression and multiple regression. This study found that intellectual capital positively affects market performance and financial performance in non-financial firms. This study also found that intellectual capital positively affects market performance and financial performance in manufacturing and service firms, but in primary sectors, this study found inconclusive results when analyzed and used two different measurements. This study contributes to the firms in non-financial firms about the development of intellectual capital in the knowledge-based economy because intellectual capital is an asset that can create market performance and financial performance.

JEL Classification: G32, O34

 

How to Cite:

Sofian, Dwijayanti, S. P. F., & Wijaya, H. (2020). Intellectual capital and firm performance in the Indonesian non-financial firms. Jurnal Keuangan dan Perbankan, 24(1), 106-116.

DOI: https://doi.org/10.26905/jkdp.v24i1.3574


Keywords


Firm performance; Intellectual capital; Intellectual Capital Index; Non-financial firms

Full Text:

PDF

References


Achelia, E., Juwita Asmara, I., & Grace Berliana, N. (2019). Professionals and technicians for industry 4.0. International Journal of Social Science and Humanity, 9(3), 63–67. https://doi.org/10.18178/ijssh.2019.v9.992

Amin, M., Hasan, H., Nezamoddin, R., & Tan, H. P. (2014). Intellectual capital and financial performance of companies listed in the Tehran stock exchange. International Journal of Learning and Intellectual Capital, 11(1), 71–90. https://doi.org/10.1504/IJLIC.2014.059231

Appuhami, B. A. R. (2007). The impact of intellectual capital on investors’ capital gains on shares : An empirical investigation of Thai Banking, finance & insurance sector. Management Review, 3(2), 14–25.

Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120. https://doi.org/10.1177/014920639101700108

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

Celenza, D., & Rossi, F. (2014). Intellectual capital and performance of listed companies: Empirical evidence from Italy. Measuring Business Excellence, 18(1), 22–35. https://doi.org/10.1108/MBE-10-2013-0054

Chen, M. C., Cheng, S. J., & Hwang, Y. (2005). An empirical investigation of the relationship between intellectual capital and firms’ market value and financial performance. Journal of Intellectual Capital, 6(2), 159–176. https://doi.org/10.1108/14691930510592771

Dženopoljac, V., Janoševic, S., & Bontis, N. (2016). Intellectual capital and financial performance in the Serbian ICT industry. Journal of Intellectual Capital, 17(2), 373–396. https://doi.org/10.1108/JIC-07-2015-0068

Firer, S., & Williams, S. M. (2003). Intellectual capital and traditional measures of corporate performance. Journal of Intellectual Capital, 4(3), 348–360. https://doi.org/10.1108/14691930310487806

Hejazi, R., Ghanbari, M., & Alipour, M. (2016). Intellectual, human, and structural capital effects on firm performance as measured by Tobin’s Q. Knowledge and Process Management, 23(4), 259–273. https://doi.org/https://doi.org/10.1002/kpm.1529

Janošević, S., Dženopoljac, V., & Bontis, N. (2013). Intellectual capital and financial performance in Serbia. Knowledge and Process Management, 20(1), 1–11. https://doi.org/https://doi.org/10.1002/kpm.1404

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. International Journal of Learning and Intellectual Capital, 14(1), 76–89. https://doi.org/10.1504/IJLIC.2017.080645

Marr, B., & Roos, G. (2005). A Strategy Perspective on Intellectual Capital. In B. Marr (Ed.), Perspectives on Intellectual Capital, 28–41. Elsevier B.V.

McGuire, T., & Brenner, L. (2015). Talent Valuation: Accelerate Market Capitalization Through Your Most Important Asset. Pearson.

Nadeem, M., Gan, C., & Nguyen, C. (2018). The importance of intellectual capital for firm performance: Evidence from Australia. Australian Accounting Review, 28(3), 334–344. https://doi.org/10.1111/auar.12184

Nimtrakoon, S. (2015). The relationship between intellectual capital, firms’ market value, and financial performance: Empirical evidence from the ASEAN. Journal of Intellectual Capital, 16(3), 587–618. https://doi.org/10.1108/JIC-09-2014-0104

Ozkan, N., Cakan, S., & Kayacan, M. (2017). Intellectual capital and financial performance: A study of the Turkish Banking Sector. Borsa Istanbul Review, 17(3), 190–198. https://doi.org/10.1016/j.bir.2016.03.001

Penrose, E. (2009). The Theory of the Growth of The Firm (Fourth Edi). Oxford University Press.

PwC. (2017). Mining in Indonesia: Investment and Taxation Guide. PwC Indonesia 9th edition.

Rexhepi, G., Ibraimi, S., & Veseli, N. (2013). Role of intellectual capital in creating enterprise strategy. Procedia - Social and Behavioral Sciences, 75, 44–51. https://doi.org/10.1016/j.sbspro.2013.04.006

Ślusarczyk, B. (2018). Industry 4.0 – Are we ready? Polish Journal of Management Studies, 17(1), 232–248. https://doi.org/10.17512/pjms.2018.17.1.19

Smriti, N., & Das, N. (2018). The impact of intellectual capital on firm performance: A study of Indian firms listed in COSPI. Journal of Intellectual Capital, 19(5), 935–964. https://doi.org/10.1108/JIC-11-2017-0156

Ståhle, P., Ståhle, S., & Aho, S. (2011). Value added intellectual coefficient (VAIC): A critical analysis. Journal of Intellectual Capital, 12(4), 531–551. https://doi.org/10.1108/14691931111181715

Tan, H. P., Plowman, D., & Hancock, P. (2007). Intellectual capital and financial returns of companies. Journal of Intellectual Capital, 8(1), 76–95. https://doi.org/10.1108/14691930710715079

UNCTAD. (2014). International Merchandise Trade Statistics.

Zéghal, D., & Maaloul, A. (2010). Analyzing value added as an indicator of intellectual capital and its consequences on company performance. Journal of Intellectual Capital, 11(1), 39–60. https://doi.org/10.1108/14691931011013325




DOI: https://doi.org/10.26905/jkdp.v24i1.3574

Refbacks

  • There are currently no refbacks.


Bookmark and Share


Jurnal Keuangan dan Perbankan (Journal of Finance and Banking)

Diploma Program of Banking and Finance, Faculty of Economics and Business, University of Merdeka Malang

Published by University of Merdeka Malang

Mailing Address:
2nd floor Finance and Banking Building, Jl. Terusan Raya Dieng No. 57 Malang, East Java, Indonesia
Phone: +62 813-3180-1534
Email: jkp@unmer.ac.id

This work is licensed under a Creative
Commons Attribution-ShareAlike 4.0