Abstract
This study aims to empirically examine the influence of intellectual capital towards company value and also its influence while being moderated by institutional ownership. This study uses purposive sampling to determine samples from manufacturing companies listed in Indonesia Stock Exchange during the year of 2014–2018. The total sample obtained in this study is 301 from the 720 population of data throughout the research year. Data analysis techniques use multiple regression and moderated regression analysis (MRA) methods. The results of this study show that Intellectual Capital has a positive significant effect on company value while institutional ownership does not have a significant effect on moderating the influence of intellectual capital towards company value. The practical implication of this study is to provide information to managers or owners of public manufacturing companies and investors about the importance of intangible assets investment like intellectual capital as the competitive strategies to achieve more optimal company value, as well as for regulator to make clear regulations about the disclosures of intangible assets.
Highlights
Competitive industry makes companies face challenges and opportunities (Bchini, 2015)
Based on the downward trend phenomenon of company value assessed by Tobin's Q in manufacturing companies for the past 5 years, this study aims to analyze whether intellectual capital affects company value and whether institutional ownership structure strengthens the influence of intellectual capital on company value
The results of this research supports the resource based theory which states that intellectual capital can increase company value
Summary
Competitive industry makes companies face challenges and opportunities (Bchini, 2015). Companies are required to use modern strategies and policies to be able to compete in order to be competitive and successful (Hejazi, Ghanbari, & Alipour, 2016). The company value demonstrates that the company is able to achieve prolonged success and this can attract investors to invest their funds in the company. The company's current value shows a plummet that has an impact on business sustainability and investor decisions in the company. Based on author’s calculation about company value measured by Tobin’s Q from the manufacturing data, the company values has been fluctuated in the past 5 years, from 2014 to 2018. The trends shows an inclination of company value during that time in which it can jeopardize the sustainability of a company. That is why a company must find a solution for that case
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