The impact of intellectual capital strategy on firm value and financial distress

Abstract

This study aims to examine the effect of intangible assets, on corporate financial performance and financial distress. Intangible assets in this study are explained by human capital efficiency (HCE), relational capital efficiency (RCE), structural capital efficiency (SCE), and capital employed efficiency (CEE). The measurement model often used is the extended value-added intellectual coefficient plus (EVAIC+) model by Ulum (2017), which is a model developed from a comparison of Edvinsson’s (1997) and Pulic’s (2000) models. Financial performance is measured by firm value with price to book value (PBV) proxy, and financial distress with Altman Z-score. This study was conducted using secondary data and sample selection using purposive sampling with samples being listed manufacturing companies in Indonesia, Singapore, Malaysia, Thailand, the Philippines and South Korea, Japan, and China Stock Exchanges for the period 2011–2021. The results of the study on Model 1 found that HCE, RCE, and CEE have a positive effect and significance and SCE have a negative effect and significance on firm value. Model 2 found that HCE, RCE, and CEE have a positive effect and SCE have a negative effect and significant on financial distress. The results of this study can be used as a reference for companies to be able to manage intangible assets, especially intellectual capital disclosure.