Intellectual Capital Effects on Firm’s Profitability with Industry Types as Moderating Variable

Mila Austria Reyes, Monika Kussetya Ciptani and Teuku Ismail Fahmi
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Mila Austria Reyes: Accounting Department, Faculty of Business, President University
Monika Kussetya Ciptani: Accounting Department, Faculty of Business, President University
Teuku Ismail Fahmi: Accounting Department, Faculty of Business, President University

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 1, 3390-3405

Abstract: Intellectual Capital has become one of the essential components for companies to be able to generate value in this era of knowledge. With the different activities, markets, needs and goals in each industry, companies have difficulties in generating value using its Intellectual Capital they have. The ability of companies to utilize their Intellectual Capital, may increase investor’s confidence in the perceived value of the company. Although many studies have been done but empirical research still shows some inconsistencies. The purpose of this research is to examine whether intellectual capital affects a company’s predicted profitability based on its return on assets (ROA), with the type of industry as moderating variable. This quantitative research was designed using total of 645 samples consisting of 129 companies divided into 10 types of industries over a five-year period (2018-2022) in Indonesia. According to the research, Intellectual Capital and its two components (Human Capital and Structural Capital), have a positive and significant influence on ROA, but Capital Employed does not have a significant impact on ROA. While the Industry Types moderates the relationship of ROA to Intellectual Capital and Human Capital. The limitation in this study is that it does not cover 5 industries out of a total of 15 types of Capital Intellectual High industries due to the lack or absence of companies in such industries on the Indonesian Stock Exchange. Despite these constraints, industry practitioners included in the sample need to pay attention to Intellectual Capital and its components as it is beneficial in order to generate a return for the company. This research also contributed to the literature of Intellectual Capital by introducing a moderation variable of the type of industry that can add new insights related to the role of Intelligent Capital in the respective types of industry.

Date: 2025
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