Abstract
This study entitled the influence of corporate governance mechanism on firm value with intellectual capital disclosure as an intervening variable. This study aims to examine the direct and indirect effect of board size, gender diversity, educational background, block holder ownership, and foreign ownership both simultaneously and partially on intellectual capital disclosure and firm value. This study examines the mediating effect of intellectual capital disclosure in the relationship between corporate governance mechanism and firm value. This study used the companies included in intellectual capital intensive industries in Indonesia Stock Exchange as the sample for 2017-2019. The sampling technique used in this study was purposive sampling, with 243 data from 81 companies. Analysis techniques used in this study were statistic descriptive, multiple regression, and path analysis used SPSS 23 for windows. The hypothesis testing results show that corporate governance mechanisms simultaneously influence intellectual capital disclosure (ICD) and firm value. Partially, only board size influences both ICD and substantial value, and educational background only influences strong value. The Sobel test shows that ICD doesn't mediate the effect of all variables related to corporate governance mechanism on firm value.
Highlights
In the era of a knowledge-based economy, traditional financial reporting practices do not include non-financial factors within the company [1]
The results of this study indicate that there is no significant effect between blockholder ownership on intellectual capital disclosure
The size of the board of commissioners, gender diversity, educational background, blockholder ownership, and foreign ownership simultaneously affect the disclosure of intellectual capital and on firm value in companies included in high intellectual capital intensive industries
Summary
In the era of a knowledge-based economy, traditional financial reporting practices do not include non-financial factors within the company [1]. Intellectual capital is a significant factor in the growth of companies in the current era of the knowledge-based economy. Intellectual capital arises from the 'gap' between the book value of the company and the company's value in the market, where this value is known as hidden value [2]. Due to the 'gap' that this formal financial report cannot represent, it must practice disclosure in its annual report [3]. Revised Manuscript received on November 30, 2021.
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