Financial Performance as an Intervening Variable in the Relationship between Intellectual Capital and Firm Value

Financial Performance as an Intervening Variable in the Relationship between Intellectual Capital and Firm Value

  • Claudia Rere Margareta , Department of Accountancy, Faculty of Economics and Business, Universitas Airlangga, Indonesia
  • Khusnul Prasetyo , Department of Accountancy, Faculty of Economics and Business, Universitas Airlangga,

Abstract

This study investigated the relationship between intellectual capital (IC) of bank and firm value listed on Bursa Efek Indonesia (BEI) with financial performance as the intervening variable. Data gathered from the financial statements published by 42 banks listed in BEI from 2012 to 2016. The quantitative approach was adopted, and the formulated hypotheses tested using linear regression analysis. The Sobel test performed to examine the mediational effect of bank financial performance. The study findings revealed that the IC had a significant effect on the financial performance of the bank. Nonetheless, the effect of IC on firm value was not statistically significant. The results revealed that financial performance mediated the relationship between IC and firm value. Hence, companies need to concentrate on the IC of their management to gain profitability and firm value. The right policies may facilitate firm growth and exert a positive value for the firm: the study limitations and future research avenue documented at the end

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