An empirical investigation of the mediating effect of financial performance on the impact of intellectual capital on corporate value  (study of finance and service companies listed in Indonesia Stock Exchange)

Iriani, Meldhan

This study aimed at: (1) Examining the impact of intellectual capital on corporate value and firm financial performance; (2) Examining the impact of physical capital, human capital, and structural capital on corporate value and financial performance; (3) Examining the influence of financial performance towards the corporate value; and (4) Investigating the mediating effect of financial performance on the impact of intellectual capital on corporate value. The VAICTM (Pulic, 1998) forms the underlying measurement basis for the three major independent variables in the present study. VAICTM is an analytical procedure designed to enable management, shareholders and other relevant stakeholders to effectively monitor and evaluate the efficiency of VA by a firm’s total resources and each major resource component. This study uses PBV and PER to proxy corporate value. The financial performance is represented by profitability and growth which are measured by ROA, ROE, DER, EG, and AG. According to Firer and Williams (2003), finance and service sector industries have intensive intellectual capital. This research employed 110 samples financial statements of finance and service companies listed in Indonesia Stock Exchange which are selected by purposive sampling. Structural Equation Modeling (SEM) analysis was used to test 6 hypotheses in this study. This study employed Analysis of Moment Structure (AMOS) version 16 for analyzing the data. The hypothesis test shows that (1) intellectual capital has no significant effect on corporate value, (2) VACA has negative impact on corporate value while VAHU and STVA has no significant impact on corporate value, (3) intellectual capital has positively significant effect on financial performance, (4) VACA and VAHU have positive impact on financial performance. Meanwhile, STVA has no significant effect on financial performance, (5) Financial performance has no positive effect on corporate value, and (6) Financial performance mediates the impact of intellectual capital on corporate value.

Abstrak

An empirical investigation of the mediating effect of financial performance on the impact of intellectual capital on corporate value (study of finance and service companies listed in Indonesia Stock Exchange)