Digital Banking, Corporate Governance, Ownership Structure, and Intellectual Capital Performance: Evidence from Indonesia

Ratna Dewi Tjendani, Ari Kuncara Widagdo, Muthmainah Muthmainah

Abstract


The base of the company’s growth has changed, from tangible assets to intangible assets. Many companies recognize the importance of IC as performance drivers. This research aimed to examine the effect of the implementation of digital banking, corporate governance, family ownership, foreign ownership, and government ownership on Intellectual Capital (IC) performance; and examined the effect of interactions between corporate governance and ownership structure on IC performance in banking companies listed on the Indonesia Stock Exchange (IDX) during 2012-2016. This research used a regression method with panel data. The total observations were 130 cases. In this research, IC performance used Value Added Intellectual Coefficient (VAIC). We proved that the implementation of digital banking did no significant implications for IC performance in the same year because it was still in the process of developing. Family ownership, foreign ownership, government ownership, and the interaction between corporate governance and ownership structure did not affect IC performance. On the contrary, this research proved that corporate governance had significant implications for improving IC performance.

JEL Classification: G31, G32, G34

DOI: https://doi.org/10.26905/jkdp.v22i4.2481


Keywords


Corporate Governance; Digital Banking; Intellectual Capital Performance; Ownership Structure

Full Text:

PDF

References


Abhayawansa, S., & Guthrie, J. (2016). Does intellectual capital disclosure in analysts’reports vary by firm characteristics ? Advances in Accounting, 35, 26-38. https://doi.org/10.1016/j.adiac.2016.04.002

Acharya, R. N., Kagan, A., & Lingam, R. S. (2008). Online banking applications and community bank performance. International Journal of Bank Marketing, 26(6), 418–439. https://doi.org/10.1108/02652320810902442

Alhassan, A. L., & Asare, N. (2016). Intellectual capital and bank productivity in emerging markets: evidence from Ghana. Management Decision, 54(3), 589–609. https://doi.org/10.1108/MD-01-2015-0025

Al-Musalli, M. A. K., & Ismail, K. N. I. K. (2012). Corporate governance, bank-specific characteristics, banking industry characteristics, and intellectual capital performance of banks in Arab Gulf Cooperation Council (GCC) countries. Asian Academy of Management Journal of Accounting and Finance, 8(1), 115–135.

Al-Musali, M. A., & Ismail, K. N. I. K. (2016). Cross-country comparison of intellectual capital performance and its impact on financial performance of commercial banks in GCC countries. International Journal of Islamic and Middle Eastern Finance and Management, 9(4), 512–531.

Al-Smadi, M. O., & Al-Wabel, S. A. (2011). The impact of e-banking on the performance of Jordanian banks. Journal of Internet Banking and Commerce, 16(2).

Andres, C. (2008). Large shareholders and firm performance - An empirical examination of founding-family ownership. Journal of Corporate Finance, 14(4), 431–445. https://doi.org/10.1016/j.jcorp

Arifin, Z., & Rachmawati, N. (2006). Pengaruh corporate governance terhadap efektifitas mekanisme pengurang masalah agensi. Jurnal Siasat Bisnis, 11(3), 237–247. http://jurnal.uii.ac.id/index.php/JSB/article/view/236

Azila-Gbettor, E. M., Honyenuga, B. Q., Berent-Braun, M. M., & Kil, A. (2018). Structural aspects of corporate governance and family firm performance: A systematic review governance. Journal of Family Business Management, 8(3), 306-330. https://doi.org/10.1108/JFBM-12-2017-0045

Barsky, N. P., & Marchant, G. (2000). The most valuable resource – Measuring and managing intellectual capital. Strategic Finance, 81(8), 58-62.

Bradley, J., Loucks, J., Jameson, P., O’Connell, K., & Barbier, J. (2014). Reimagining the digital bank. Cisco and/ or its affiliates. Retrieved from: https://www.cisco.com/c/dam/en/us/solutions/collateral/executive-perspectives/Internet-of-Everything-executive-summary.pdf.

Chartered Institute of Management Accountants. (2000). CIMA Annual Report. Kuala Lumpur.

Claessens, S., Djankov, S., & Lang, L. H. P. (2000). The separation of ownership and control in East Asian corporations. Journal of Financial Economics, 58(1-2), 81–112. https://doi.org/10.1016/S0304-405X(00)00067-2

Connelly, B. L., Hoskisson, R. E., Tihanyi, L., & Certo, S. T. (2010). Ownership as a form of corporate governance. Journal of Management Studies, 47(8), 1561–1589. https://doi.org/10.1111/j.1467-6486.2010.00929.x

Daryaee, A., Pakdel, A., Easapour, K., & Khalaflu, M. M. (2011). Intellectual capital, corporate value, and corporate governance (evidence from Tehran Stock Exchange (TSE)). Australian Journal of Basic and Applied Sciences, 5(12), 821–826.

Deloitte Tax & Consulting. (2017). Digital banking benchmark-improving the digital performance. Deloitte Digital, 4–28. Retrieved from: https://www2.deloitte.com/content/dam/Deloitte/lu/Documents/financial-services/Banking/lu-digital-banking-benchmark.pdf.

Dzenopoljac, V., Yaacoub, C., Elkanj, N. & Bontis, N. (2017). Impact of intellectual capital on corporate performance: Evidence from the Arab region. Journal of Intellectual Capital. 18(4), 884-903. https://doi.org/10.1108/JIC-01-2017-0014

El‐Bannany, M. (2012). Global financial crisis and the intellectual capital performance of UAE banks. Journal of Human Resource Costing & Accounting, 16(1), 20–36. https://doi.org/10.1108/14013381211272626

Fan, J. P. H., & Wong, T. J. (2002). Corporate ownership structure and the informativeness of accounting earnings. Journal of Accounting & Economies, 33(3), 401–425. https://doi.org/10.1016/S0165-4101(02)00047-2

Forte, W., Tucker, J., Matonti, G., & Nicolò, G. (2017). Measuring the intellectual capital of Italian listed companies. Journal of Intellectual Capital, 18(4), 710–732. https://doi.org/10.1108/JIC-08-2016-0083

Gopalan, S., & Rajan, R. (2010). Financial sector de-regulation in emerging Asia: Focus on foreign bank entry. MPRA Paper. University Library of Munich.

Greco, G., Ferramosca, S., & Allegrini, M. (2014). Exploring intellectual capital in family firms. An empirical investigation. International Journal of Learning and Intellectual Capital, 11(2), 91-106. https://doi.org/10.1504/IJLIC.2014.060802

Gujarati, D. N. (2009). Basic Econometric. New York: McGraw Hill.

Gulamhussen, M. A., & Guerreiro, L. (2009). The influence of foreign equity and board membership on corporate strategy and internal cost management in Portuguese banks. Management Accounting Research, 20(1), 6–17. https://doi.org/10.1016/j.mar.2008.10.006

Hamdan, A. (2018). Intellectual capital and firm performance: Differentiating between accounting-based and market-based performance. International Journal of Islamic and Middle Eastern Finance and Management, 11(1), 139–151. https://doi.org/10.1108/IMEFM-02-2017-0053

Hermawan, A. A. (2011). The influence of effective board of commissioners and audit committee on the informativeness of earnings: Evidence from Indonesian listed firms. Asia Pacific Journal of Accounting and Finance, 2(1), 1–34. Retrieved from: http://apjaf.ui.ac.id/index.php/apjaf/article/view/17

Herusetya, A. (2017). Earnings benchmarks and timeliness of audit reports: Corporate governance mechanism as moderating variable. Parhyangan International 3rd Accounting and Business Conference, 627–640.

Hunardy, N., & Tarigan, J. (2015). Pengaruh kepemilikan pemerintah terhadap kinerja keuangan melalui dewan komisaris independen sebagai variabel intervening. Business Accounting Review, 5(2), 601–612.

Jensen, M., & Meckling, W. (1976). Theory of the firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X

Kamardin, H., Bakar, R. A., & Ishak, R. (2017). Intellectual capital disclosure: The effect of family and non-executive directors on board. Advanced Science Letters, 23(4), 3102–3106. https://doi.org/10.1166/asl.2017.7665

Keenan, J., & Aggestam, M. (2001). Corporate governance and intellectual capital: Some conceptualisations. Journal of Corporate Governance: An International Review, 9(4), 259-275. https://doi.org/10.1111/1467-8683.00254

Kehelwalatenna, S. (2016). Intellectual capital performance during financial crises. Measuring Business Excellence, 20(3), 55-78. https://doi.org/10.1108/MBE-08-2015-0043

Khairiyansyah K., & Vebtasvili V. (2018). Relationship between intellectual capital with profitability and productivity in Indonesian banking industry. Jurnal Keuangan dan Perbankan, 22(1), 127-136. https://doi.org/10.26905/jkdp.v22i1.1577

Khlif, H., Ahmed, K., & Souissi, M. (2017). Ownership structure and voluntary disclosure: A synthesis of empirical studies. Australian Journal of Management, 42(3), 376–403. https://doi.org/10.1177/0312896216641475

Laukkanen, T. (2016). Consumer adoption versus rejection decisions in seemingly similar service innovations: The case of the internet and mobile banking. Journal of Business Research, 69(7), 2432–2439. https://doi.org/10.1016/j.jbusres.2016.01.013

Loderer, C., Stulz, R., & Waelchli, U. (2016). Firm rigidities and the decline in growth opportunities firm rigidities and the decline in growth opportunities. Management Science, 63(9), 2773-3145. https://doi.org/10.1287/mnsc.2016.2478

Makki, M. A., & Lodhi, S. A. (2014). Impact of corporate governance on intellectual capital efficiency and financial performance. Pakistan Journal of Commerce and Social Sciences, 8(2), 305–330.

March, J. G., & Olsen, J. P. (1976). Ambiguity and Choice in Organizations. Norway: Universitetsforlaget.

Marr, B., & Moustaghfir, K. (2005). Defining intellectual capital: A three‐dimensional approach. Management Decision, 43(9), 1114–1128. https://doi.org/10.1108/00251740510626227

Mbama, C. I., & Ezepue, P. O. (2018). Digital banking, customer experience, and bank financial performance: UK customers’perceptions. International Journal of Bank Marketing, 36(2), 230–255. https://doi.org/10.1108/IJBM-11-2016-0181

Min, B. S., & Bowman, R. G. (2015). Corporate governance, regulation, and foreign equity ownership : Lessons from Korea. Economic Modelling, 47, 145–155. https://doi.org/10.1016/j.econmod.2015.02.030

Mondal, A., & Ghosh, S. K. (2012). Intellectual capital and financial performance of Indian banks. Journal of Intellectual Capital, 13(4), 515–530. https://doi.org/10.1108/14691931211276115

Muawanah, U. (2014). Corporate governance dan kepemilikan keluarga. Jurnal Akuntansi Multiparadigma, 5(2), 299–313. http://dx.doi.org/10.18202/jamal.2014.08.5024

Muhammadi, A. H. (2016). Three essays on political connections, financial reporting, and auditing–evidence from Indonesian listed companies. Unpublished doctoral dissertation. Massey University New Zealand.

Osinski, M., Selig, P. M., Matos, F., & Roman, D. J. (2017). Methods of evaluation of intangible assets and intellectual capital. Journal of Intellectual Capital, 18(3), 470–485. https://doi.org/10.1108/JIC-12-2016-0138

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

Peraturan Bank Indonesia number 14/8/PBI/2012. (2012). Kepemilikan Saham Bank Umum.

Peraturan Otoritas Jasa Keuangan number 55/POJK.03/2016. (2016). Penerapan Tata Kelola Bagi Bank Umum.

Peraturan Otoritas Jasa Keuangan number 56/POJK. 03/2016. (2016). Kepemilikan Saham Bank Umum.

Perrini, F., Rossi, G., & Rovetta, B. (2008). Does ownership structure affect performance? Evidence from the Italian Market, Corporate Governance: An International Review, 16(4), 312–325. https://doi.org/10.1111/j.1467-8683.2008.00695.x

Pukthuanthong, K., Walker, T. J., Thiengtham, D. N., & Du, H. (2013). Does family ownership create or destroy value? Evidence from Canada. International Journal of Managerial Finance, 9(1), 13–48. https://doi.org/10.1108/17439131311298511

Polovina, N., & Peasnell, K. (2015). The effect of foreign management and board membership on the performance of foreign acquired Turkish banks. International Journal of Managerial Finance, 11(3), 359–387. https://doi.org/10.1108/09574090910954864

Prayogo, B., & Agoes, S. (2017). Role of audit regulation on the effect of corporate governance and audit quality on earnings management. OIDA International Journal of Sustainable Development, 10(10), 53-66.

Pulic, A. (2000). VAIC TM – An accounting tool for IC management. International Journal Technology Management, 20(5), 702–714. https://doi.org/10.1504/IJTM.2000.002891

Pulic, A. (2004). Intellectual capital-does it create or destroy value? Measuring Business Excellence, 8(1), 62–68. https://doi.org/10.1108/13683040410524757

Riahi‐Belkaoui, A. (2003). Intellectual capital and firm performance of US multinational firms. Journal of Intellectual Capital, 4(2), 215–226. https://doi.org/10.1108/14691930310472839

Rochmadhona, B. N., Suganda, T. R., & Cahyadi, S. (2018). The competitive advantage between intellectual capital and financial performance of banking sector in ASEAN. Jurnal Keuangan dan Perbankan, 22(2), 321–334. https://doi.org/10.26905/jkdp.v22i2.2060

Sabrina, F. N., & Muharam, H. (2015). Analisis pengaruh kepemilikan pemerintah, kepemilikan asing, risiko likuiditas dan risiko kredit terhadap kinerja keuangan bank. Diponegoro Journal of Management, 4(1), 1–13. Retrieved from: https://ejournal3.undip.ac.id/index.php/djom/article/view/13026

Sakawa, H., & Watanabel, N. (2018). Family control and ownership monitoring in Stakeholder-oriented corporate governance. Management Decision. https://doi.org/10.1108/MD-04-2018-0480

Saleh, N. M., Rahman, M. R. C. A., & Hassan, M. S. (2009). Ownership structure and intellectual capital performance in Malaysia. Asian Academy of Management Journal of Accounting and Finance, 5(1), 1–29.

Saputra, A. A. D., & Wardhani, R. (2017). Pengaruh efektivitas dewan komisaris, komite audit, dan kepemilikan institusional terhadap efisiensi investasi. Jurnal Akuntansi & Auditing Indonesia, 21(1), 24–36. https://doi.org/10.20885/jaai.vol21.iss1.art3

Schiavone, F., Meles, A., Verdoliva, V., & Giudice, M. Del. (2014). Does location in a science park really matter for firms’intellectual capital performance? Journal of Intellectual Capital, 15(4), 497–515. https://doi.org/10.1108/JIC-07-2014-0082

Shahveisi, F., Khairollahi, F., & Alipour, M. (2016). Does ownership structure matter for corporate intellectual capital performance ? An empirical test in the Iranian context. Eurasian Business Review. https://doi.org/10.1007/s40821-016-0050-8

Sharma, S. K., Govindaluri, S. M., & Al Balushi, S. M. (2015). Predicting determinants of internet banking adoption. Management Research Review, 38(7), 750–766. https://doi.org/10.1108/MRR-06-2014-0139

Sharma, S. K., Govindaluri, S. M., Al-Muharrami, S., & Tarhini, A. (2017). A multi-analytical model for mobile banking adoption: A developing country perspective. Review of International Business and Strategy, 27(1), 133–148. https://doi.org/10.1108/RIBS-11-2016-0074

Shleifer, A., & Vishny, R. W. (1997). A survey of corporate governance. The Journal of Finance, 52(2), 737–783. https://doi.org/10.1111/j.1540-6261.1997.tb04820.x

Shen, W., & Lin, C. (2009). Firm profitability, state ownership, and top management turnover at the listed firms in China: A behavioral perspective. Corporate Governance: 6t5An International Review, 17(4), 443–456. https://doi.org/10.1111/j.1467-8683.2009.00725.x

Supradnya, I. N. T., Ulupui, I. G. K. A., & Putri, I. G. A. M. A. . (2016). Pengaruh jenis industri, kepemilikan manajerial, kepemilikan institusional, dan kepemilikan asing terhadap kinerja modal intelektual. Simposium Nasional Akuntansi XIX Lampung, 1–20.

Tiwari, R., & Vidyarthi, H. (2018). Intellectual capital and corporate performance: A case of Indian banks. Journal of Accounting in Emerging Economies, 8(1), 84–105. https://doi.org/10.1108/JAEE-07-2016-0067

Tunay, K. B., & Yüksel, S. (2017). The relationship between corporate governance and foreign ownership of the banks in developing countries. Contaduría Y Administración, 62(5), 1627–1642. https://doi.org/10.1016/j.cya.2017.05.007

Usoff, C. A., Thibodeau, J. C., & Burnaby, P. (2002). The importance of intellectual capital and its effect on performance measurement systems. Managerial Auditing Journal, 17(1/2), 9–15. https://doi.org/10.1108/02686900210412180

VanderKaay, S. (2000). Measuring the vital signs of intellectual capital. CMA Management, 74(4), 18-21.

Veltri, S., & Silvestri, A. (2011). Direct and indirect effects of human capital on firm value: Evidence from Italian companies. Journal of Human Resource Costing & Accounting, 15(4), 232–254. https://doi.org/10.1108/14013381111178596

Villalonga, B., & Amit, R. (2006). How do family ownership, control, and management affect firm value? Journal of Financial Economics, 80(2), 385–417. https://doi.org/10.1016/j.jfineco.2004.12.005

Wahid, A. H. D. A., Abu, N. A., Latif, W. A., & Smith, M. (2013). Corporate governance and intellectual capital: Evidence from public and private universities. Higher Education Studies, 3(1), 63–78. https://doi.org/10.5539/hes.v3n1p63

Watts, R. L. (2006). What has the invisible hand achieved? Accounting and Business Research, 36(sup1), 51–61. https://doi.org/10.1080/00014788.2006.9730046




DOI: https://doi.org/10.26905/jkdp.v22i4.2481

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: -
Email: [email protected]

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