Impact of Intellectual Capital on Financial Performance: Panel Evidence from Banking Industry in Indonesia

Ummu Salma Al-Azizah and Bagus Pamungkas Wibowo

Economic Studies journal, 2023, issue 5, 51-65

Abstract: This research investigates the impact of intellectual capital (IC) on the financial performance of Indonesian bank enterprises. Data were collected from 42 Indonesian banks between 2017 and 2021. IC was measured using descriptive statistics, correlation coefficients, and panel data regression techniques, as well as the Value Added Intellectual Coefficient (VAIC) component through Human Capital Efficiency (HCE), Capital Employed Efficiency (CEE), and Structural Capital Efficiency (SCE), and their impact on financial performance through Return on Assets (ROA), Return on equity (ROE), and Asset Turnover (ATO). The analysis was conducted with secondary data extracted from the firms’ annual reports. The results show the impact of the VAIC model and the VAIC component on financial performance. The VAIC model significantly affects financial performance, namely ROA, ROE, and ATO. The VAIC component does not significantly affect financial performance results, although SCE significantly affects financial performance as measured by ATO. This research expands the knowledge and evaluates financial performance and the creation of corporate bank value. It can be used across industries, and the findings have implications for the banking industry in the context of competitive advantage and for company managers. This study presents empirical evidence and broadens our understanding of the use of IC to enhance the financial performance of Indonesian banking firms.

JEL-codes: G21 G32 J24 O34 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.iki.bas.bg/Journals/EconomicStudies/20 ... -Salma-Al-Azizah.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bas:econst:y:2023:i:5:p:51-65

Access Statistics for this article

More articles in Economic Studies journal from Bulgarian Academy of Sciences - Economic Research Institute Contact information at EDIRC.
Bibliographic data for series maintained by Diana Dimitrova ().