ISBN : 978-602-6697-30-1

THE EFFECT OF INTELLECTUAL CAPITAL ON FINANCIAL

PERFORMANCE
(Empirical Study on Consumer Goods Industrial Companies
Listed on IDX in 2015-2017)

Ismi Khoerunnisa1, Anggi Setyawan, Muhammad ‘Afif Abdulmujib

Faculty of Economics and Business
Universitas Muhammadiyah Purwokerto
e-mail : khoerunnisaismi@gmail.com

ABSTRACT
This study aims to examine the effect of intellectual capital on the company's financial performance.
The dependent variable used in this study is the company's financial performance, while the independent
variables is intellectual capital. The population in this study are consumer goods industrial companies listed
on the IDX. Determination of the sample using purposive sampling method by generating data as many as 115
samples. Data analysis used descriptive analysis and multiple linear regression with the help of SPSS software
version 23. The results of hypothesis testing showed that intellectual capital had a significant positive effect
on the company's financial performance.
Keywords: intellectual capital, financial performance.

INTRODUCTION
Minister of Industry projects that the sectors that will spur the growth of the national consumer goods
industry in 2018, are the automotive, electronics, chemical, pharmaceutical, and food and beverage sub-sectors.
This sub-sector is expected to be able to achieve the non-oil and gas processing industry growth target in 2018
which has been set at 5.67%. The Ministry of Industry noted that the food and beverage industry's contribution
to the GDP of the non-oil and gas industry reached 34.95% in the third quarter of 2017.
Judging from the development of investment realization, the food and beverage industry sector for
domestic investment in 2017 reached 27.92 trillion or an increase of 16.3% compared to the 2016 period.
Meanwhile, foreign investment amounted to USD 1.46 billion (Kemenperin.go. en). Companies do not only
focus on physical capital, but also focus on intellectual capital which is a characteristic of science-based
companies (Ekowati et al, 2012). Ekowati et al (2012) stated that companies can develop and survive from
globalization if the growth of physical capital and financial capital is in line with the growth of intellectual
capital.
Steward (1997) defines intellectual capital as ownership of knowledge and experience, professional
skills and knowledge, good relations and technological capacity, which when applied will provide a
competitive advantage for the company. According to Rupidara (2008) intellectual capital is placed in a
strategic place in the context of the performance or progress of an organization or economy for several reasons.
First, the phenomenon of a shift in the type of economy from an industrial and service economy to a knowledge
economy. Second, at the micro-enterprise level, it seems rather difficult to exclude or link these developments
within the context of competition and the search for the basis of competitive advantage. Previous research
conducted by Ulum (2012), Baroroh (2013), Brown (2015), Tseng and Goo (2013), Pratama (2016), Pratama
and Wibowo (2017) stated that intellectual capital has a positive effect on the company's financial performance.
Previous research conducted by Is, Kamaliah et al (2014) stated that intellectual capital has a positive
significant effect on the company's financial performance. Meanwhile, Kuryanto and Syafrudin (2013),
Yuniasih et al (2011), Yanwari (2015), state that intellectual capital has a negative effect on the company's
financial performance.
This research focuses on Consumer Goods Industrial Companies listed on the Indonesia Stock
Exchange (IDX) in 2015-2017 by examining the effect of Intellectual Capital on the Company's Financial
Performance.

LITERATURE REVIEW AND HYPOTHESES

Resource Based Theory
Resource Dependence Theory (RBT) explains that the creation of a sustainable competitive advantage
is closely related to the company's ability to maintain valuable, rare, and irreplaceable resources and allocate
and deploy these resources effectively (Barney, 1991). Kozlenkova et al (2014) explain that the basic logic of
this theory is based on two fundamental assumptions about a firm's resources and explains how these resources
can generate a sustainable competitive advantage and why some firms can consistently outperform other firms.
First, firms have different resources, even within the same industry (Barney et al, 2003). RBT theory states that

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companies that have superior and competitive intellectual capital can win the competition in the market
industry so that they can create value and achieve optimal business performance (Barney, 2007).

The influence of intellectual capital on the company's financial performance

RBT explains that Intellectual Capital is the core of value creation and company's competitive
advantage (Barney, 1991). From an RBT perspective, the creation of a sustainable competitive advantage is
closely related to a firm's ability to retain valuable, rare and irreplaceable asset resources and also allocate and
deploy these resources effectively (Barney, 1991). Chen et al (2005) found that Intellectual Capital owned by
the company has a positive effect on the market value and financial performance of the company, and can also
be an indicator for future financial performance. Meanwhile, Clarke et al (2011) also found that there is a direct
relationship between Intellectual Capital and the financial performance of companies listed on the Australian
Stock Exchange. Several other studies have also found evidence that Intellectual Capital has a positive impact
on the company's financial performance (Tan et al, 2007; Firer 29 and Stainbank, 2003). Research by Pratama
and Wibowo (2017), Pratama (2016) reveals that Intellectual Capital has a positive effect on the company's
financial performance. On the basis of this, the following hypothesis is made:
H1: Intellectual capital has a positive effect on the company's financial performance

Research methods
Population and Sample
The population in this study are consumer goods industrial companies listed on the Indonesia Stock
Exchange for the 2015-2017 period. While the sample used in this study is the consumer goods sector
companies. The sample technique uses a purposive sampling method based on the sample criteria that have
been selected in this study, so a research sample of 39 companies is obtained for each year where the period
used in the study is 2015-2017. So that the total sample used is 115.

Operational Definition and Measurement of Variables

Independent Variable
Intellectual Capital
Pulic (2000, 2004) created a model to measure IC components in creating value and competitive
advantage for companies, the model is called Value Added Intellectual Coefficient (VAIC). VAIC takes a
relatively simple quantitative approach based on company accounting information to measure IC and its
components (Pulic, 2000).
Intellectual Capital (IC) (represented by VAIC). IC was measured using VAIC, which was developed
by Pulic (2000; 2004). VAIC is calculated using the following equation :
𝑉𝐴𝐼𝐶 = 𝐻𝐶𝐸 + 𝑆𝐶𝐸 + 𝐶𝐸𝐸
Where:
VAIC = Value added intellectual coefficient
HCE = VA / HC ; human capital efficiency coefficient
SCE = SC / VA ; structural capital efficiency coefficient
CEE = VA / CE ; capital using efficiency coefficient
VA = OUT - IN = OP + EC + D + A
VA is a calculation of output (OUT) (calculated from total sales) minus input (IN) (calculated from
materials purchased, or the cost of goods or services sold), it can also be calculated by adding operating income
(OP), employee costs ( EC), depreciation (D) and amortization (A)
HCE = total salary and wages
SC E = VA- HC; structural capital
CEE = book value of net assets
Dependent Variable
Company Financial Performance
Return on Assets (ROA) is the ratio of net profit taxes which also means a measure to assess how
much the rate of return on assets owned by the company (Bambang R, 1997). Positive Return On Assets (ROA)
indicates that the total assets used for the company's operations are able to provide profits for the company.
Conversely, if the ROA is negative, it shows that the total assets used do not provide a profit/loss. ROA is
calculated using the following formula:
𝑃𝑟𝑜𝑓𝑖𝑡 𝑏𝑒𝑓𝑜𝑟𝑒 𝑡𝑎𝑥
𝑅𝑂𝐴 =
Total Asset

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Data analysis technique
Regression analysis is basically a study of the dependence of the dependent variable with one or more
independent variables with the aim of estimating and or predicting the population mean or the average value
of the dependent variable based on known independent variables (Ghozali, 2011). The regression equations
contained in this study are:
𝑅𝑂𝐴 = 𝛼 + 𝛽1 𝑖𝑛𝑡𝑒𝑙𝑙𝑒𝑐𝑡𝑢𝑎𝑙 𝑐𝑎𝑝𝑖𝑡𝑎𝑙 + 𝜀
Information :
ROA = Company Performance
 = Constant
Intellectual = Intellectual Capital
 = Error term

RESEARCH RESULTS AND DISCUSSION

Descriptive Statistical Analysis
Data analysis with descriptive statistics provides an overview of the data that can be seen from the
minimum value, maximum value, average value and standard deviation. The results are as follows:

Table 1. Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

Intellectual Capital 106 1,52 17506,16 539,4546 2448,69729
Financial 106 0,0005 0,2801 0,097767 0,0712938
Performance
Valid N (listwise) 106

Table 1 shows that the company's financial performance from 106 samples of companies that the
average value for the company's Financial Performance variable is 0.097767 with a standard deviation value
of 0.0712938, meaning that the average value ( mean ) is lower than the standard deviation is a reflection of
deviations. very high, so that the spread of the data shows abnormal results and causes bias. The average value
( mean ) of intellectual capital is 539.4546 with a standard deviation of 2448.69729, meaning that the average
value ( mean ) is lower than the standard deviation, which is a reflection of very high deviations, so that the
spread of the data shows abnormal results and causes biased.

Regression Analysis
Regression analysis was used to determine the effect of the independent variable on the dependent
variable. The results of linear regression analysis can be seen in Table 2 as follows:

Table 2. Multiple Linear Regression Test

Coefficientsa
Unstandardized Standardized
Model Coefficients Coefficients t Sig
B Std. Error Beta
1 (Constant) -0,347 0,102 -3,401 0,001
Intellectual 1,103E-5 0,000 0,379 4,586 0,000
Capital

Based on the results of the regression coefficients above, a linear regression equation model can be made as
follows:
𝐼𝐶𝐷 = −0,374 + 0,000001103 𝑖𝑛𝑡𝑒𝑙𝑙𝑒𝑐𝑡𝑢𝑎𝑙 𝑐𝑎𝑝𝑖𝑡𝑎𝑙 + 𝜀

Determinant Test Results (Adjusted R 2 )

Table 3. Determination Test

Model Summary

Model R R Square Adjusted R Std. Error of the

Square Estimate
1 0,553a 0,305 0,285 0,0602880

Based on table 3 the results of the coefficient of determination obtained the Adjusted R Square value
of 0.285, which means that 28.5% of the financial performance variables can be explained by the variables of
intellectual capital while the remaining 71.5% is explained by other variables outside the regression model. .

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F Statistical Test Results
Tabel 4 F Test

ANOVAa
Model Sum of Square df Mean F Sig.
Square
Regression 0,163 3 0,054 14,945 0,000b
1 Residual 0,371 102 0,004
Total 0,534 105

Table 4 shows that the calculated F value is 14.945, which is indicated by a positive sign, so the
direction of the relationship is positive. The value statistically shows a significant result at a = 0.05, which is
0.000, meaning that the significance value is <0.05. This shows model can be used to predict the dependent
variable of financial performance.

t-test results
Tabel 5. Hypothesis Test

Coefficientsa
Unstandardized Standardized
Model Coefficients Coefficients t Sig
B Std. Error Beta
1 (Constant) -0,347 0,102 -3,401 0,001
Intellectual 1,103E-5 0,000 0,379 4,586 0,000
Capital

a. Dependent Variable: Financial Performance

Based on table 5, it is obtained that the t value of intellectual capital of 4,586. With a total of 106, the
resulting degrees of freedom (df) = 102 from nk (106-4) with a significance value of 0.05 so that the t table
value is 1.98350.

Discussion
Hypothesis Testing Results
From the results of the partial test calculation, the t-count value is 4.586 with a significance value of
0.000. Because the significance value is less than 0.05 and the t value is 4.586, the hypothesis is accepted. This
indicates that there is a positive influence between the Intellectual Capital variable on the Financial
Performance variable. In accordance with the Resource-based theory which makes intellectual capital the basis
of competitive advantage and the company's financial performance (Barney et al., 2011). Intellectual capital
is closely related to competitive advantage because this competitive advantage will provide added value to the
company if the company can utilize the components of intellectual capital optimally (Barney, 1991). The results
of this study are in line with research from Pratama (2016), Pratama & Wibowo (2017), Ekowati et al (2012),
Is et al (2014) which state that intellectual capital has a positive impact on the company's financial performance.
Conclusions and suggestions
This study is intended to determine the effect of intellectual capital on the financial performance of
companies in the consumer goods industry sector listed on the Indonesia Stock Exchange in the 2015-2017
period. The conclusions that can be drawn from this study are based on the test results that intellectual capital
has proven to have a positive effect on the performance of consumer goods industry companies listed on the
Indonesia Stock Exchange from 2015-2017. Based on the conclusions described above, the researcher can
provide suggestions for further research as follows: Future research is expected to be able to add other variables
that can affect the financial performance of consumer goods industry companies (ROA).

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