Title: Modified value-added intellectual coefficient (MVAIC) and traditional financial performance of Indonesian biggest companies

Authors: Ihyaul Ulum; Noviar Kharismawati; Dhaniel Syam

Addresses: Accounting Department, University of Muhammadiyah Malang, Malang, Indonesia ' Accounting Department, University of Muhammadiyah Malang, Malang, Indonesia ' Accounting Department, University of Muhammadiyah Malang, Malang, Indonesia

Abstract: The purpose of this study is to examine the influences of intellectual capital performance - measured with modified value added intellectual coefficient (MVAIC) - to four traditional financial performances: return on assets, return on equity, market to book value and price earnings ratio. The data were drawn from 50 biggest market capitalisation companies listed in the Indonesia stock exchange for 8 years (2007-2014). It is an empirical study using WarpPLS 3.0 for the data analysis. The finding shows that: MVAIC influences positively to current and future financial performance. It means that MVAIC can be used to predict the future of financial performance. The results extend the understanding of the role of intellectual capital in creating corporate value and building sustainable advantages for companies in emerging economies.

Keywords: Indonesian biggest companies; intellectual capital performance; modified value added intellectual coefficient; MVAIC; traditional financial performance.

DOI: 10.1504/IJLIC.2017.086390

International Journal of Learning and Intellectual Capital, 2017 Vol.14 No.3, pp.207 - 219

Received: 29 Jul 2016
Accepted: 28 Apr 2017

Published online: 17 Aug 2017 *

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