The Determinants of Intellectual Capital in Improving Indonesian Transportation Firms’ Performance

Hartati, Noorina and Idrus, Olivia (2018) The Determinants of Intellectual Capital in Improving Indonesian Transportation Firms’ Performance. In: 3rd Comparative Asia Africa Governmental Accounting (CAAGA) Conference 2018, 14-15 November 2018, Seoul, South Korea.

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Abstract

Previous studies that investigate the relationship between intellectual capital and financial performance or market value show conflicting results. Meanwhile, intellectual capital begin to overtake physical capital as the most important assets for firms. consequently, this study aims to analyze the determinants of intellectual capital in enhancing transportation firms’ performance. We use transportation firms listed in the Indonesian Stock Exchange (IDX) in 2011-2015. Specifically, based on Oktari et al. (2016), this study aims which factors that determine the ability of intellectual capital in improving firm performance. We use three independent variables in this study, namely, Value Added Capital Employed (VACA), Value Added Human Capital (VAHU) and Structural Capital Value Added (STVA) as the proxies of intellectual capital that are measured using the Value Added Intellectual Coefficient (VAICTM) model of Pulic (2004). The dependent variables are Return On Assets (ROA) and Return On Equity (ROE) as the proxies of firm performance. Using multivariate linear regression analysis, we show that VACA (CE), VAHU (HC) and STVA (SC) variables do not affect ROA and ROE as the proxies of firm performance. However, the VAICTM variable that combines VACA (CE), VAHU (HC) and STVA (SC) positively affect both ROA and ROE.

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