Understanding the Impact of Intellectual Capital on Financial Performance and Its Impact on Firm Value: A Literature Review

Abstract

This research aims to find out whether intellectual capital can influence financial performance, thereby, impacting company value using the journal review method. Research journals containing the variables of intellectual capital, financial performance, and company value were used. The results of the research show that there is a relationship between intellectual capital and financial performance and its influence on company value through three components contained in intellectual capital: human capital efficiency (HCE), structural capital efficiency (SCE), and capital efficiency used (CEE), including physical and financial capital. The contribution of intellectual capital to company performance will vary from one industry to another. Industries that rely on creativity and innovation will require a higher level of intellectual capital. The results of this research conclude that the existence of intellectual capital within the company is an important company asset. Companies that can manage their intellectual capital effectively will have better financial performance and higher company value. Intellectual capital can influence financial performance and company value.
 Keywords: intellectual capital, financial performance, company value