Modified value-added intellectual coefficient (MVAIC) and traditional financial performance of Indonesian biggest companies

Abstract

The purpose of this study is to examine the influences of intellectual capital performance-measured with modified value added intellectual coefficient (MVAIC)-to four traditional financial performances: return on assets, return on equity, market to book value and price earnings ratio. The data were drawn from 50 biggest market capitalisation companies listed in the Indonesia stock exchange for 8 years (2007-2014). It is an empirical study using WarpPLS 3.0 for the data analysis. The finding shows that: MVAIC influences positively to current and future financial performance. It means that MVAIC can be used to predict the future of financial performance. The results extend the understanding of the role of intellectual capital in creating corporate value and building sustainable advantages for companies in emerging economies.

The Effect of Intellectual Capital Performance on Company's Financial Performance

“…The higher the intellectual capital performance has in line with the better the financial performance (Ulum, Kharismawati and Syam, 2017). IC is not only had a positive influence on the company's financial performance for the current year, but it can also predict the company's future financial performance.…”

“…The relationship between IC and company performance has been proven empirically by several previous researchers. Ulum, Kharismawati, and Syam (2017) examine the effect of MVAIC on the company's traditional financial performance and found that MVAIC has a positive effect on the company's financial performance. Research of Hermawan, Hanun, and Pamungkas (2019) on financial sector companies with high IC intensity found that VAIC has a positive effect on financial performance and market performance.…”

“…Pulic & Kolakovic stated that every company has unique knowledge, skills, values, and intangible resource solutions which can be used to create excellence competitive and good long-term company performance (Ulum, Kharismawati, & Syam, 2017). The science and education system stated that IC determines a factor production but human knowledge does not have to dominate in the structure, because in industry 4.0 one of the most popular factors is technology with a broad practical perspective and implementation (Vodenko & Lyausheva, 2020).…”

Efektywność kapitału intelektualnego a wyniki finansowe przedsiębiorstwa

“…Znalazła szerokie zastosowanie w badaniach empirycznych, zyskując zarówno zwolenników, jak i przeciwników. VAIC TM traktowany jest jako miara wydajności kapitału intelektualnego (ICP -Intellectual Capital Performance) [Ulum, Kharismawati, Syam 2017] i określany przez Mavridisa [2004], Kamatha [2007] i Uluma [2009b] jako wskaźnik wydajności biznesowej.…”

“…Przeprowadzenie badania w tym przypadku niesie ze sobą istotne implikacje dla praktyki biznesowej. Zastosowanie metodyki opracowanej przez Pulicia oraz poddanej pewnym modyfikacjom [Ulum i in. 2017;Maji, Goswami 2017] podyktowane było przede wszystkim celem badania oraz tym, że metoda ta znajduje zastosowanie w przypadku jednostek, których akcje nie stanowią przedmiotu obrotu giełdowego.…”