Abstract
The objective of study is to find the influence of company size, human capital investments, and leverage on financial performance. Case studies on State-Owned Banks and State-Owned Sharia Banks in Indonesia for the 2012-2018 period. The number of samples uses in the study were four State-Owned Banks and four State-Owned Sharia Banks in Indonesia. The samples of this study were the financial report that taken from the Indonesia Stock Exchange and the Indonesia Financial Service Authority with period 2012-2018. The analysis method for this research is linear regression methods, test of classic assumption, determinant coefficient, F-test, T-test. The findings show that the size and leverage variables have no significantly effect on financial performance in State-Owned Banks, while the human capital investments have a positive effect and significantly on financial performance. The results also show that human capital and leverage have no impact on financial performance in State-Owned Sharia Banks, but has size have significant effect on financial performance. Human capital investment was most variable that impact financial performance significantly in State-Owned Banks. Otherwise, size was the most significantly variable that effect financial performance in State-Owned Sharia Banks. The results show that the size and leverage variables have no significantly effect on financial performance in State-Owned Banks, while the human capital investments have positive effect and significantly on financial performance. The results also show that human capital and leverage have no significantly effect on financial performance in State-Owned Sharia Banks, but size have significantly effect on financial performance. Human capital investment is the most significant variable that influence financial performance in State-Owned Banks. Otherwise, size is the most significant variable that influence financial performance in State-Owned Sharia Banks.
Highlights
Company performance is a measure of success in managers in company running
Financial data used include Return On Assets (ROA) as a measure of financial performance, and Human Capital data measured by Size, Human Capital Investments in the form of employee training costs, and leverage
The findings of this study describe that investment in human resources can make the company's financial performance is good, because human capital investments measured by employee training costs in this study
Summary
Company performance is a measure of success in managers in company running. Company performances’ information is required by parties with an interest in the company, such as shareholders, creditors, the government, or the public, especially shareholders (Isbanah, 2015). Measuring the company's financial performance from a financial perspective is very valid, but basic driver of financial value is human capital that consist of knowledge, ideas, and innovations (Mayo, 2000). The intellectual capital’s lifeblood is human capital, innovations’ source and improvements’ source, but not easy to measure (Sawarjuwono, 2003). Human capital can be measure with indicators size, human capital investments, and leverage (Scafarto, 2018). Commitment in human capital investment can show great results on capital accumulation so it is often a more efficient choice (Michael Waldman, 2020)
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: International Journal of Islamic Business and Economics (IJIBEC)
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
