Governance mechanism and intellectual capital on financial performance in banking industries
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Published:
Aug 30, 2023
Keywords:
Banking, Board of Directors, Independent Commissioner, Intellectual Capital, ROA
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Decision Support System
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Abstract
Banking in the current technological era must be able to compete with other banks by innovating through its resources so as to attract consumer interest. Intellectual capital is an intangible asset owned by a company that can have added value to financial performance. This study aims to examine Intellectual Capital as a moderator of Mechanism Governance proxied by Independent Commissioners and the Board of Directors on Financial Performance proxied by ROA. The sample used in this study is the banking annual report listed on the IDX for 2019-2021. Moderating Regression Analysis is used as an analytical tool in this study. The results of the study show that the Independent Commissioner has a non-significant positive influence on ROA. The Board of Directors has a significant negative influence on ROA. Meanwhile, the influence of the Independent Commissioners and the Board of Directors on ROA can be moderated by Intellectual Capital . The Existence of independent commissioners and boards of directors can improve management performance to be able to focus more on intellectual capital in the company
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Ruslandy, N. ., Uzliawati, L. . and Sholeha, N. (2023) “Governance mechanism and intellectual capital on financial performance in banking industries”, Jurnal Mantik, 7(2), pp. 649-658. doi: 10.35335/mantik.v7i2.3779.
References
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Aulia, A. N., Mustikawati, R. I., & Hariyanto, S. (2020). Profitabilitas, ukuran perusahaan dan intellectual capital terhadap nilai perusahaan. Jurnal Riset Mahasiswa Manajemen, 8(1).
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Dopuch, N., King, R. R., & Schwartz, R. (2003). Independence in appearance and in fact: An experimental investigation. Contemporary Accounting Research, 20(1), 79–114.
García Castro, J. P., Duque Ramírez, D. F., & Moscoso Escobar, J. (2021). The relationship between intellectual capital and financial performance in Colombian listed banking entities. Asia Pacific Management Review, 26(4), 237–247. https://doi.org/10.1016/j.apmrv.2021.03.002
Ge, F., & Xu, J. (2021). Does intellectual capital investment enhance firm performance? Evidence from pharmaceutical sector in China. Technology Analysis and Strategic Management, 33(9), 1006–1021. https://doi.org/10.1080/09537325.2020.1862414
Gómez, J. I. M., Cortés, D. L., & Betancourt, G. G. (2017). Effect of the Board of Directors on firm performance. International Journal of Economic Research, 14(6), 349–361.
Harrison, S., & Sullivan, P. H. (2000). Profiting from intellectual capital:Learning from leading companies. Journal of Intellectual Capital, 1(1), 33–46. https://doi.org/10.1108/14691930010324124
Hidalgo, R. L., García-Meca, E., & Martínez, I. (2011). Corporate Governance and Intellectual Capital Disclosure. Journal of Business Ethics, 100(3), 483–495. https://doi.org/10.1007/s10551-010-0692-x
Hussain, S., Ahmad, T., & Hassan, S. (2019). Corporate Governance and Firm performance using GMM. International Journal of Information, Business and Management, 11(2), 300–316.
Intia, L. C., & Azizah, S. N. (2021). The Influence of the Board of Directors, Independent Board of Commissioners, and Sharia Supervisory Board on the Financial Performance of Islamic Banking in Indonesia. Journal of Financial and Accounting Research, 7(2), 46–59.
Khamisah, N., Nani, D. A., & Ashsifa, I. (2020). Pengaruh Non-Performing Loan ( NPL ), BOPO dan Ukuran Perusahaan Terhadap Return on Assets ( ROA ) Perusahaan Perbankan yang Terdaftar di Bursa Efek Indonesia ( BEI ). 3(2), 18–23.
Lee, Y., & Huang, C. (2012). The Relationships between Balanced Scorecard , Intellectual Capital , Organizational Commitment and Organizational Performance: Verifying a ‘ Mediated Moderation ’ Model. 1(3), 140–153.
Li, Y., Gong, Y., Burmeister, A., Wang, M., Alterman, V., Alonso, A., & Robinson, S. (2021). Leveraging age diversity for organizational performance: An intellectual capital perspective. Journal of Applied Psychology, 106(1), 71.
Lukviarman, N. (2004). Ownership Structure and Firm Performance: The case of Indonesia. In Curtin Theses (Issue 2, pp. 1–27).
Nazir, M. I., Tan, Y., & Nazir, M. R. (2021). Intellectual capital performance in the financial sector: Evidence from China, Hong Kong, and Taiwan. International Journal of Finance and Economics, 26(4), 6089–6109. https://doi.org/10.1002/ijfe.2110
Neves, E., & Proença, C. (2021). Intellectual capital and financial performance: evidence from Portuguese banks. International Journal of Learning and Intellectual Capital, 18(1), 93–108.
Obeidat, U., Obeidat, B., Alrowwad, A., Alshurideh, M., Masa’deh, R., & Abuhashesh, M. (2021). The effect of intellectual capital on competitive advantage: The mediating role of innovation. Management Science Letters, 11, 1331–1344. https://doi.org/10.5267/j.msl.2020.11.006
Olarewaju, O. M., & Msomi, T. S. (2021). Intellectual capital and financial performance of South African development community’s general insurance companies. Heliyon, 7(4), e06712. https://doi.org/10.1016/j.heliyon.2021.e06712
Ozkan, N., Cakan, S., & Kayacan, M. (2017). Intellectual capital and financial performance: A study of the Turkish Banking Sector. Borsa Istanbul Review, 17(3), 190–198.
Prasojo, P. (2015). Pengaruh Penerapan Good Corporate Governance terhadap Kinerja Keuangan Bank Syariah. Jurnal Dinamika Akuntansi Dan Bisnis, 2(1), 59–69.
Pulic, A. (1998). Measuring the performance of intellectual potential in knowledge economy. 2nd McMaster Word Congress on Measuring and Managing Intellectual Capital by the Austrian Team for Intellectual Potential, 1–20.
Rossi, M., Festa, G., Chouaibi, S., Fait, M., & Papa, A. (2021). The effects of business ethics and corporate social responsibility on intellectual capital voluntary disclosure. Journal of Intellectual Capital, 22(7), 1–23. https://doi.org/10.1108/JIC-08-2020-0287
Saputra, W. S. (2019). Pengaruh diversitas dewan direksi terhadap nilai perusahaan. 4(3), 503–510.
Sari, A. P., & Priyadi, M. P. (2017). Pengaruh intellectual capital dan corporate governance terhadap kinerja perusahaan. Jurnal Ilmu Dan Riset Akuntansi (JIRA), 6(7).
Sharabati, A. A. A., Jawad, S. N., & Bontis, N. (2010). Intellectual capital and business performance in the pharmaceutical sector of Jordan. Management Decision, 48(1), 105–131. https://doi.org/10.1108/00251741011014481
Shih, K., Chang, C., & Lin, B. (2010). Assessing knowledge creation and intellectual capital in banking industry. Journal of Intellectual Capital.
Stewart, T. A. (1997). Intellectual Capital: The New Wealth Of Organizations, Nicholas Brealey Pub. Ltd., London.
Subramaniam, M. (2005). The influence of intellectual capital on the types of innovative capabilities. 48(3), 450–463.
Tiwari, R. (2022). Nexus between intellectual capital and profitability with interaction effects: panel data evidence from the Indian healthcare industry. Journal of Intellectual Capital, 23(3), 588–616.
Torre, C. (2020). Technology usage , intellectual capital , firm performance and employee satisfaction?: the accountants ’ idea. https://doi.org/10.1108/TQM-04-2020-0070
Tsai, W., & Ghoshal, S. (1998). Social capital and value creation: The role of intrafirm networks. Academy of Management Journal, 41(4), 464–476.
Uzliawati, L. (2015). Dewan Komisaris Dan Intellectual Capital Disclosure Pada Perbankan Di Indonesia. Jurnal Keuangan Dan Perbankan, 19(2), 226–234.
Wijaya, R. (2019). Analisis perkembangan return on assets (ROA) dan return on equity (ROE) untuk mengukur kinerja keuangan. 40–51.
Alves, H., Cepeda-carrion, I., Ortega-gutierrez, J., & Edvardsson, B. (2021). The role of intellectual capital in fostering SD-Orientation and firm performance. 22(1), 57–75. https://doi.org/10.1108/JIC-11-2019-0262
Amaliyah, F., & Herwiyanti, E. (2019). Pengaruh kepemilikan institusional, dewan komisaris independen, dan komite audit terhadap nilai perusahaan sektor pertambangan. Jurnal Akuntansi, 9(3), 187–200.
Aulia, A. N., Mustikawati, R. I., & Hariyanto, S. (2020). Profitabilitas, ukuran perusahaan dan intellectual capital terhadap nilai perusahaan. Jurnal Riset Mahasiswa Manajemen, 8(1).
Bala, A. J., Raja, A. S., & Dandago, K. I. (2019). The mediating effect of intellectual capital on corporate governance and performance of conglomerates in Nigeria. SEISENSE Journal of Management, 2(3), 16–29.
Dopuch, N., King, R. R., & Schwartz, R. (2003). Independence in appearance and in fact: An experimental investigation. Contemporary Accounting Research, 20(1), 79–114.
García Castro, J. P., Duque Ramírez, D. F., & Moscoso Escobar, J. (2021). The relationship between intellectual capital and financial performance in Colombian listed banking entities. Asia Pacific Management Review, 26(4), 237–247. https://doi.org/10.1016/j.apmrv.2021.03.002
Ge, F., & Xu, J. (2021). Does intellectual capital investment enhance firm performance? Evidence from pharmaceutical sector in China. Technology Analysis and Strategic Management, 33(9), 1006–1021. https://doi.org/10.1080/09537325.2020.1862414
Gómez, J. I. M., Cortés, D. L., & Betancourt, G. G. (2017). Effect of the Board of Directors on firm performance. International Journal of Economic Research, 14(6), 349–361.
Harrison, S., & Sullivan, P. H. (2000). Profiting from intellectual capital:Learning from leading companies. Journal of Intellectual Capital, 1(1), 33–46. https://doi.org/10.1108/14691930010324124
Hidalgo, R. L., García-Meca, E., & Martínez, I. (2011). Corporate Governance and Intellectual Capital Disclosure. Journal of Business Ethics, 100(3), 483–495. https://doi.org/10.1007/s10551-010-0692-x
Hussain, S., Ahmad, T., & Hassan, S. (2019). Corporate Governance and Firm performance using GMM. International Journal of Information, Business and Management, 11(2), 300–316.
Intia, L. C., & Azizah, S. N. (2021). The Influence of the Board of Directors, Independent Board of Commissioners, and Sharia Supervisory Board on the Financial Performance of Islamic Banking in Indonesia. Journal of Financial and Accounting Research, 7(2), 46–59.
Khamisah, N., Nani, D. A., & Ashsifa, I. (2020). Pengaruh Non-Performing Loan ( NPL ), BOPO dan Ukuran Perusahaan Terhadap Return on Assets ( ROA ) Perusahaan Perbankan yang Terdaftar di Bursa Efek Indonesia ( BEI ). 3(2), 18–23.
Lee, Y., & Huang, C. (2012). The Relationships between Balanced Scorecard , Intellectual Capital , Organizational Commitment and Organizational Performance: Verifying a ‘ Mediated Moderation ’ Model. 1(3), 140–153.
Li, Y., Gong, Y., Burmeister, A., Wang, M., Alterman, V., Alonso, A., & Robinson, S. (2021). Leveraging age diversity for organizational performance: An intellectual capital perspective. Journal of Applied Psychology, 106(1), 71.
Lukviarman, N. (2004). Ownership Structure and Firm Performance: The case of Indonesia. In Curtin Theses (Issue 2, pp. 1–27).
Nazir, M. I., Tan, Y., & Nazir, M. R. (2021). Intellectual capital performance in the financial sector: Evidence from China, Hong Kong, and Taiwan. International Journal of Finance and Economics, 26(4), 6089–6109. https://doi.org/10.1002/ijfe.2110
Neves, E., & Proença, C. (2021). Intellectual capital and financial performance: evidence from Portuguese banks. International Journal of Learning and Intellectual Capital, 18(1), 93–108.
Obeidat, U., Obeidat, B., Alrowwad, A., Alshurideh, M., Masa’deh, R., & Abuhashesh, M. (2021). The effect of intellectual capital on competitive advantage: The mediating role of innovation. Management Science Letters, 11, 1331–1344. https://doi.org/10.5267/j.msl.2020.11.006
Olarewaju, O. M., & Msomi, T. S. (2021). Intellectual capital and financial performance of South African development community’s general insurance companies. Heliyon, 7(4), e06712. https://doi.org/10.1016/j.heliyon.2021.e06712
Ozkan, N., Cakan, S., & Kayacan, M. (2017). Intellectual capital and financial performance: A study of the Turkish Banking Sector. Borsa Istanbul Review, 17(3), 190–198.
Prasojo, P. (2015). Pengaruh Penerapan Good Corporate Governance terhadap Kinerja Keuangan Bank Syariah. Jurnal Dinamika Akuntansi Dan Bisnis, 2(1), 59–69.
Pulic, A. (1998). Measuring the performance of intellectual potential in knowledge economy. 2nd McMaster Word Congress on Measuring and Managing Intellectual Capital by the Austrian Team for Intellectual Potential, 1–20.
Rossi, M., Festa, G., Chouaibi, S., Fait, M., & Papa, A. (2021). The effects of business ethics and corporate social responsibility on intellectual capital voluntary disclosure. Journal of Intellectual Capital, 22(7), 1–23. https://doi.org/10.1108/JIC-08-2020-0287
Saputra, W. S. (2019). Pengaruh diversitas dewan direksi terhadap nilai perusahaan. 4(3), 503–510.
Sari, A. P., & Priyadi, M. P. (2017). Pengaruh intellectual capital dan corporate governance terhadap kinerja perusahaan. Jurnal Ilmu Dan Riset Akuntansi (JIRA), 6(7).
Sharabati, A. A. A., Jawad, S. N., & Bontis, N. (2010). Intellectual capital and business performance in the pharmaceutical sector of Jordan. Management Decision, 48(1), 105–131. https://doi.org/10.1108/00251741011014481
Shih, K., Chang, C., & Lin, B. (2010). Assessing knowledge creation and intellectual capital in banking industry. Journal of Intellectual Capital.
Stewart, T. A. (1997). Intellectual Capital: The New Wealth Of Organizations, Nicholas Brealey Pub. Ltd., London.
Subramaniam, M. (2005). The influence of intellectual capital on the types of innovative capabilities. 48(3), 450–463.
Tiwari, R. (2022). Nexus between intellectual capital and profitability with interaction effects: panel data evidence from the Indian healthcare industry. Journal of Intellectual Capital, 23(3), 588–616.
Torre, C. (2020). Technology usage , intellectual capital , firm performance and employee satisfaction?: the accountants ’ idea. https://doi.org/10.1108/TQM-04-2020-0070
Tsai, W., & Ghoshal, S. (1998). Social capital and value creation: The role of intrafirm networks. Academy of Management Journal, 41(4), 464–476.
Uzliawati, L. (2015). Dewan Komisaris Dan Intellectual Capital Disclosure Pada Perbankan Di Indonesia. Jurnal Keuangan Dan Perbankan, 19(2), 226–234.
Wijaya, R. (2019). Analisis perkembangan return on assets (ROA) dan return on equity (ROE) untuk mengukur kinerja keuangan. 40–51.
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