The implication of intellectual capital and profitability on firm value
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Jul 26, 2023
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Abstract
This study aims to determine the effect of intellectual capital and profitability on firm value. This research can provide information about factors that can increase firm value in the midst of intense global competition, especially consumption companies that require a good image in the eyes of consumers. Intellectual capital in this study is measured by the VAIC formula, while profitability uses the ROE proxy, and firm value is measured by the TOBINSQ. There were 61 company samples and 305 observational data were obtained with a range of research years from 2017 – 2021. This study used a panel data regression model using stata research tools and the most powerful model, namely Command Effect model. The regression results show that VAIC has effect on TOBINSQ but not significant, and ROE has a significant positive effect on TOBINSQ.
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How to Cite
Widowati, E. H., & Bertuah, E. (2023). The implication of intellectual capital and profitability on firm value. Enrichment : Journal of Management, 13(3), 1806-1812. https://doi.org/10.35335/enrichment.v13i3.1487
References
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Janamrung, B., & Issarawornrawanich, P. (2015). The association between corporate social responsibility index and performance of firms in industrial products and resources industries: Empirical evidence from Thailand. Social Responsibility Journal, 11(4), 893–903. https://doi.org/10.1108/SRJ-11-2013-0141
Jannata, S. N., & Pertiwi2, T. K. (2022). Analisis Nilai Perusahaan Sektor Industri Barang Konsumsi Sub Sektor Makanan dan Minuman di Bursa Efek Indonesia. El-Mal: Jurnal Kajian Ekonomi & Bisnis Islam, 3(4), 753–768. https://doi.org/10.47467/elmal.v3i4.1074
Kemenperin. (2017). RI-Singapura Susun Standar Bersama. Kemenperin.Go.Id. https://kemenperin.go.id/artikel/18266/RI-Singapura-Susun-Standar-Bersama
Komara, A., Ghozali, I., & Januarti, I. (2020). Examining the Firm Value Based on Signaling Theory. 123(Icamer 2019), 1–4. https://doi.org/10.2991/aebmr.k.200305.001
Kurniati, S. (2019). Stock returns and financial performance as mediation variables in the influence of good corporate governance on corporate value. Corporate Governance (Bingley), 19(6), 1289–1309. https://doi.org/10.1108/CG-10-2018-0308
Lim, H., & Rokhim, R. (2020). Factors affecting profitability of pharmaceutical company: an Indonesian evidence. Journal of Economic Studies, 48(5), 981–995. https://doi.org/10.1108/JES-01-2020-0021
Mahrani, M., & Soewarno, N. (2018). The effect of good corporate governance mechanism and corporate social responsibility on financial performance with earnings management as mediating variable. Asian Journal of Accounting Research, 3(1), 41–60. https://doi.org/10.1108/AJAR-06-2018-0008
Mehralian, G., Rajabzadeh, A., Sadeh, M. R., & Rasekh, H. R. (2012). Intellectual capital and corporate performance in Iranian pharmaceutical industry. Journal of Intellectual Capital, 13(1), 138–158. https://doi.org/10.1108/14691931211196259
Nadeem, M., Dumay, J., & Massaro, M. (2017). If You Can Measure It, You Can Manage It: A Case of Intellectual Capital. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3032145
Ni, Y., Cheng, Y. R., & Huang, P. (2020). Do intellectual capitals matter to firm value enhancement? Evidences from Taiwan. Journal of Intellectual Capital, 22(4), 725–743. https://doi.org/10.1108/JIC-10-2019-0235
Nugroho, D. S. (2021). The Effect of Financial Condition on Firm Value: A Comparative Study. Jurnal Ilmiah Akuntansi Dan Bisnis, 16(2), 199. https://doi.org/10.24843/jiab.2021.v16.i02.p02
Ovechkin, D., Boldyreva, N., & Davydenko, V. (2020). Intellectual capital and value: testing new IC measures in Russia. Journal of Economic Studies, 48(6), 1111–1127. https://doi.org/10.1108/JES-05-2020-0226
Pulic, A. (2000). VAICTM – An Accounting Tool for Intellectual Capital Management. International Journal Technology Management, 20(5/6/7/8), 702–714.
Pulic, A. (2004). Intellectual capital – does it create or destroy value? Measuring Business Excellence, 8(1), 62–68. https://doi.org/10.1108/13683040410524757
Purbawangsa, I. B. A., Solimun, S., Fernandes, A. A. R., & Mangesti Rahayu, S. (2020). Corporate governance, corporate profitability toward corporate social responsibility disclosure and corporate value (comparative study in Indonesia, China and India stock exchange in 2013-2016). Social Responsibility Journal, 16(7), 983–999. https://doi.org/10.1108/SRJ-08-2017-0160
Rahayu, S. M., & Saifi, M. (2019). The reciprocal relationship between profitability and capital structure and its impacts on the corporate values of manufacturing companies in Indonesia. https://doi.org/10.1108/IJPPM-05-2018-0196
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
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
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
Tariq Bhutta, N., & Hasan, A. (2013). Impact of Firm Specific Factors on Profitability of Firms in Food Sector. Open Journal of Accounting, 02(02), 19–25. https://doi.org/10.4236/ojacct.2013.22005
Ulum, I., Rizqiyah, & Jati, A. W. (2016). Intellectual capital performance: A comparative study between financial and non-financial industry of Indonesian biggest companies. International Journal of Economics and Financial Issues, 6(4), 1436–1439.
Vishnu, S., & Gupta, V. K. (2014). Intellectual capital and performance of pharmaceutical firms in India. Journal of Intellectual Capital, 15(1), 83–99. https://doi.org/10.1108/JIC-04-2013-0049
Widowati, E. H., Sumarta, N. H., & Pradono, N. S. H. (2017). Management Background, Intellectual Capital and the Financial Performance of Indonesian Banking. Jurnal Dinamika Akuntansi, 8(2), 161. https://doi.org/10.15294/jda.v8i2.9311
Galbreath, J. (2005). Which resources matter the most to firm success? An exploratory study of resource-based theory. Technovation, 25(9), 979–987. https://doi.org/10.1016/j.technovation.2004.02.008
Halim, Y. R., & Wijaya, H. (2020). Pengaruh Modal Intelektual Terhadap Kinerja Perusahaan Dengan Manajemen Risiko Perusahaan Sebagai Moderasi. Jurnal Akuntansi Keuangan Dan Bisnis, 13(2), 78–87. https://jurnal.pcr.ac.id/index.php/jakb/
Janamrung, B., & Issarawornrawanich, P. (2015). The association between corporate social responsibility index and performance of firms in industrial products and resources industries: Empirical evidence from Thailand. Social Responsibility Journal, 11(4), 893–903. https://doi.org/10.1108/SRJ-11-2013-0141
Jannata, S. N., & Pertiwi2, T. K. (2022). Analisis Nilai Perusahaan Sektor Industri Barang Konsumsi Sub Sektor Makanan dan Minuman di Bursa Efek Indonesia. El-Mal: Jurnal Kajian Ekonomi & Bisnis Islam, 3(4), 753–768. https://doi.org/10.47467/elmal.v3i4.1074
Kemenperin. (2017). RI-Singapura Susun Standar Bersama. Kemenperin.Go.Id. https://kemenperin.go.id/artikel/18266/RI-Singapura-Susun-Standar-Bersama
Komara, A., Ghozali, I., & Januarti, I. (2020). Examining the Firm Value Based on Signaling Theory. 123(Icamer 2019), 1–4. https://doi.org/10.2991/aebmr.k.200305.001
Kurniati, S. (2019). Stock returns and financial performance as mediation variables in the influence of good corporate governance on corporate value. Corporate Governance (Bingley), 19(6), 1289–1309. https://doi.org/10.1108/CG-10-2018-0308
Lim, H., & Rokhim, R. (2020). Factors affecting profitability of pharmaceutical company: an Indonesian evidence. Journal of Economic Studies, 48(5), 981–995. https://doi.org/10.1108/JES-01-2020-0021
Mahrani, M., & Soewarno, N. (2018). The effect of good corporate governance mechanism and corporate social responsibility on financial performance with earnings management as mediating variable. Asian Journal of Accounting Research, 3(1), 41–60. https://doi.org/10.1108/AJAR-06-2018-0008
Mehralian, G., Rajabzadeh, A., Sadeh, M. R., & Rasekh, H. R. (2012). Intellectual capital and corporate performance in Iranian pharmaceutical industry. Journal of Intellectual Capital, 13(1), 138–158. https://doi.org/10.1108/14691931211196259
Nadeem, M., Dumay, J., & Massaro, M. (2017). If You Can Measure It, You Can Manage It: A Case of Intellectual Capital. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3032145
Ni, Y., Cheng, Y. R., & Huang, P. (2020). Do intellectual capitals matter to firm value enhancement? Evidences from Taiwan. Journal of Intellectual Capital, 22(4), 725–743. https://doi.org/10.1108/JIC-10-2019-0235
Nugroho, D. S. (2021). The Effect of Financial Condition on Firm Value: A Comparative Study. Jurnal Ilmiah Akuntansi Dan Bisnis, 16(2), 199. https://doi.org/10.24843/jiab.2021.v16.i02.p02
Ovechkin, D., Boldyreva, N., & Davydenko, V. (2020). Intellectual capital and value: testing new IC measures in Russia. Journal of Economic Studies, 48(6), 1111–1127. https://doi.org/10.1108/JES-05-2020-0226
Pulic, A. (2000). VAICTM – An Accounting Tool for Intellectual Capital Management. International Journal Technology Management, 20(5/6/7/8), 702–714.
Pulic, A. (2004). Intellectual capital – does it create or destroy value? Measuring Business Excellence, 8(1), 62–68. https://doi.org/10.1108/13683040410524757
Purbawangsa, I. B. A., Solimun, S., Fernandes, A. A. R., & Mangesti Rahayu, S. (2020). Corporate governance, corporate profitability toward corporate social responsibility disclosure and corporate value (comparative study in Indonesia, China and India stock exchange in 2013-2016). Social Responsibility Journal, 16(7), 983–999. https://doi.org/10.1108/SRJ-08-2017-0160
Rahayu, S. M., & Saifi, M. (2019). The reciprocal relationship between profitability and capital structure and its impacts on the corporate values of manufacturing companies in Indonesia. https://doi.org/10.1108/IJPPM-05-2018-0196
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
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
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
Tariq Bhutta, N., & Hasan, A. (2013). Impact of Firm Specific Factors on Profitability of Firms in Food Sector. Open Journal of Accounting, 02(02), 19–25. https://doi.org/10.4236/ojacct.2013.22005
Ulum, I., Rizqiyah, & Jati, A. W. (2016). Intellectual capital performance: A comparative study between financial and non-financial industry of Indonesian biggest companies. International Journal of Economics and Financial Issues, 6(4), 1436–1439.
Vishnu, S., & Gupta, V. K. (2014). Intellectual capital and performance of pharmaceutical firms in India. Journal of Intellectual Capital, 15(1), 83–99. https://doi.org/10.1108/JIC-04-2013-0049
Widowati, E. H., Sumarta, N. H., & Pradono, N. S. H. (2017). Management Background, Intellectual Capital and the Financial Performance of Indonesian Banking. Jurnal Dinamika Akuntansi, 8(2), 161. https://doi.org/10.15294/jda.v8i2.9311