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The Effect of Intellectual Capital on the Company Value: The Case of Banking Companies in Indonesia

Author

Listed:
  • Anita Yesi

    (Sriwijaya University, Palembang, Indonesia)

  • Didik Susetyo

    (Sriwijaya University, Palembang, Indonesia)

  • Rela Sari

    (Sriwijaya University, Palembang, Indonesia)

Abstract

The value of the company includes all forms of value that determine its health and well-being in the long run. With the development of innovations, intangible assets and firm's business model became an important component of the company's value. This study aims to determine the effect of intellectual capital on the value of banking companies in Indonesia. The analysis also covers other factors affecting the company's value, namely the company's size and good corporate governance. The object of the study is 43 banking companies in Indonesia whose shares are listed on the Indonesian Stock Exchange. The data for the analysis are taken from the financial reporting forms of companies for 2015-2020, which are published on the website of the Indonesian Stock Exchange (www.idx.co.id) and the companies' websites. The methodological basis of the analysis is panel data regression performed in the EViews program. Company value in this study is measured using the Tobin Q. Intellectual capital is measured based on the added value created by physical capital, human capital and structural capital. Company size is measured using the natural logarithm of total assets. Good corporate governance is measured through managerial ownership, institutional ownership, audit committee and board of commissioners. The study results show that intellectual capital significantly impacts the value of banking companies in Indonesia. In addition, the company's value is also affected by its size and implementation of good corporate governance. The results of the qualitative analysis indicate that intellectual capital affects the business organization in various ways, such as increasing competitive advantage, promoting innovation, increasing employee competence and operational efficiency.

Suggested Citation

  • Anita Yesi & Didik Susetyo & Rela Sari, 2022. "The Effect of Intellectual Capital on the Company Value: The Case of Banking Companies in Indonesia," Oblik i finansi, Institute of Accounting and Finance, issue 2, pages 124-133, June.
    • Handle: RePEc:iaf:journl:y:2022:i:2:p:124-133
    DOI: 10.33146/2307-9878-2022-2(96)-124-133
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    References listed on IDEAS

    as
    1. Ihyaul Ulum & Rizqiyah & Ahmad Waluya Jati, 2016. "Intellectual Capital Performance: A Comparative Study between Financial and Non-Financial Industry of Indonesian Biggest Companies," International Journal of Economics and Financial Issues, Econjournals, vol. 6(4), pages 1436-1439.
    2. Djoko Suhardjanto & Mari Wardhani, 2010. "Praktik Intellectual Capital Disclosure Perusahaan yang Terdaftar di Bursa Efek Indonesia," Jurnal Akuntansi dan Auditing Indonesia, Accounting Department, Faculty of Business and Economics, Universitas Islam Indonesia, vol. 14(1).
    3. Djoko Suhardjanto & Mari Wardhani, 2010. "Praktik Intellectual Capital Disclosure Perusahaan Yang Terdaftar Di Bursa Efek Indonesia," Jurnal Akuntansi dan Auditing Indonesia, Accounting Department, Faculty of Business and Economics, Universitas Islam Indonesia, vol. 14(1), pages 71-85, Juni.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    company value; intellectual capital; company size; good corporate governance; banking companies;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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