Abstract
The purpose of this study is to explain the effect of Intellectual Capital on the company’s financial performance and market value. The population used in this study are all large trasing subsector companies listed on the Indonesia Stock Exchange during the 2009-2018 studi period. The sampling technique in this study uses a purposive sampling technique that uses criteria that have been determined by researches in order to obtain a sample of 13 companies. The testing tool used is Partial Least Square (PLS) version 2.0. The result of this study indicate that there is a positive and significant influence of intellectual capital on the company’s financial performance and intellectual capital also has a positive and significant on the company’s market value.The suggestion in this research is companie wish to consider the use of intellectual capital to improve financial performance and market value of the company.
Highlights
Developments in the field of knowledge and technology require companies to be able to apply, manage and utilize employee knowledge and advances in technology as the basis for industrial development (Suwatno & Donni, 2011)
The population in this study are all major trading companies operating in Indonesia and listed on the Indonesia Stock Exchange (IDX) from 2009 to 2018
The criteria used in this study are as follows: (1) Companies that are consecutively listed in the major trading sub-sector on the Indonesia Stock Exchange during the study period 2009-2018
Summary
Developments in the field of knowledge and technology require companies to be able to apply, manage and utilize employee knowledge and advances in technology as the basis for industrial development (Suwatno & Donni, 2011). According to Law Number 7 of 2014 Article 20, it is stated that the workforce of trading companies must be competent in their fields, so that superior and competent human quality is needed. According to Ting and Lean (2009) in the research that has been conducted, it is stated that in the new era in the current economy, more innovation is needed than human resources to support the development of the company, which will be difficult for competitors to follow. One of the components used in measuring business knowledge which is currently developing is known as intellectual capital (IC). IC components are intangible assets, and a combination of intangible assets with knowledge assets as the basis for organizational competence (Surjandari & Minanari, 2019)
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