THE EVIDENCE OF INTELLECTUAL CAPITAL

A Study of Indonesia Banking Sector Dealing with ASEAN Economic

Community in Year 2015-2017

EMY CHARISMA
20150420243
BACKGROUND | Intellectual Capital
Business Sector

Competitive Knowledge-
Advantage Based Strategy

Intellectual Increase in
Capital Intangible Asset
BACKGROUND | ASEAN Region

Source : ASEAN Human Capital Outlook 2015

PREVIOUS RESEARCH
Independent Dependent Sample
Variable Variable

Intellectual Financial
Chen et al (2005) Taiwanese listed companies
Capital Performance and Firm Value

Intellectual
Yalaman (2013) Firm Value Turkish banking sector
Capital
Financial
Intellectual Performance and Firm Value Indonesian listed banking
Khasanah (2016)
Capital Moderating: Companies
Ownership

Nikmah and Intellectual Financial Indonesian listed banking

Irsyahma (2016) Capital Performance and Firm Value Companies

Ardalan and Askarian (2014) Intellectual Capital Financial Distress

Companies listed in Tehran Stock

Pour et. al. (2014) Intellectual Capital Risk of Financial Distress
Exchange

Firm Value and Risk of Financial Banking Companies in Indonesia,

This research Intellectual Capital
Distress Malaysia, Philippine, and Thailand
RESEARCH’S QUESTION

1. Does the Intellectual Capital (VAIC) positively

influence firm value of banking companies in
Indonesia, Malaysia, Philippine, and Thailand?

2. Does the Intellectual Capital (VAIC) positively

influence risk of financial distress of banking
companies in Indonesia, Malaysia, Philippine,
and Thailand?
RESEARCH’S OBJECTIVE

1. To analyze the positive influence of

Intellectual Capital on firm value of
banking companies in Indonesia,
Malaysia, Philippine, and Thailand.

1. To analyze the positive influence of

Intellectual Capital on risk of financial
distress of banking companies in
Indonesia, Malaysia, Philippine, and
Thailand.
RESEARCH’S CONTRIBUTION
Contribute to related countries
THEORITICAL but also help the manager of the
company to measure and
Can shows financial
PRACTICAL evaluate how far the level of
performance that may arise the
intellectual capital in the firm.
risk of financial distress. It also
can be used to develop the
quality of the assets as the
investment especially
intellectual capital.
RESEARCH’S SCOPE

Independent variable in this research is Intellectual

Capital (VAIC). Dependent Variable are Firm Value (M/B)
and Risk of Financial Distress (Z-Score Index)

Samples used in this research are banking companies that

listed in Bursa Efek Indonesia (BEI or IDX), Bursa Malaysia
(BM), Philippine Stock Exchange (PSE), and Stock
Exchange of Thailand (SET) during year 2015-2017.
THEORITICAL FRAMEWORK
Stakeholder
Theory

Resources-Based
Theory
HYPOTHESES DEVELOPMENT
Effective and efficient use of resource, influence the increase of intellectual
capital value. Moreover, the management and the development of good
resources also increase company’s growth and market value. With those
advantages, company can increase its market value that is marked by the
advanced company’s share price.

In line with Resources-Based Theory

1 Insert your desired text here.
Previous Research :
(+) Chen et. al. (2005), Nikmah and Irsyahma (2016)
2 Insert your desired text here.
𝑯𝟏𝒂 : Intellectual Capital positively influences Firm Value Banking Companies in
Indonesia.
𝑯𝟏𝒃
Malaysia.
3 Insert your desired text here.
: Intellectual Capital positively influences Firm Value Banking Companies in

𝑯𝟏𝒄 : Intellectual Capital positively influences Firm Value Banking Companies in

Philippine.
𝑯𝟏𝒅 : Intellectual Capital positively influences Firm Value Banking Companies in
Thailand.
HYPOTHESES DEVELOPMENT

Risk of
Intellectual Company
Financial
Capital Performance
Distress

1 Insert
Previous Research : your desired text here.
Ardalan and Askarian (2014), Pour et. al. (2014)

𝑯𝟐𝒂 : IntellectualInsert
2 your desired
Capital positively text
influences Risk here.
of Financial Distress
Banking Companies in Indonesia.
𝑯𝟐𝒃 : Intellectual Capital positively influences Risk of Financial Distress
3 Insert your desired text here.
Banking Companies in Malaysia.
𝑯𝟐𝒄 : Intellectual Capital positively influences Risk of Financial Distress
Banking Companies in Philippine.
𝑯𝟐𝒅 : Intellectual Capital positively influences Risk of Financial Distress
Banking Companies in Thailand.
RESEARCH MODEL
Your text here

Your text here

(+) Firm Value

Your text here

Intellectual
Capital
Your text here
(+) Risk of Financial
Distress
Your text here
Your text here
Your text here
 RESEARCH METHODOLOGY
SAMPLING TECHNIQUE
Purposive Technique

OBJECT
Banking sector companies in DATA COLLECTION
Indonesia, Malaysia, Philippine, TECNIQUES
and Thailand
Documentation Method
TYPE OF DATA
Secondary Data
PURPOSIVE SAMPLING

Banking companies listed in Bursa Efek Indonesia, Bursa

1 Malaysia, Philippine Stock Exchange, Stock Exchange of
Thailand

2 Published its financial statements

3 Disclosed their intangible assets

4 This is a sample text.

VARIABLE AND MEASUREMENT
INDEPENDENT VARIABLE
Value Added Human 𝑉𝑎𝑙𝑢𝑒 𝐴𝑑𝑑𝑒𝑑
VAHU = 𝐻𝑢𝑚𝑎𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙
Capital (VAHU)
Intellectual Capital Value Added Capital 𝑉𝑎𝑙𝑢𝑒 𝐴𝑑𝑑𝑒𝑑
VACA = 𝐶𝑎𝑝𝑖𝑡𝑎𝑙 𝐸𝑚𝑝𝑙𝑜𝑦𝑒𝑑
(VAIC) Employed (VACA)
Structural Capital Value 𝑆𝑡𝑟𝑢𝑐𝑡𝑢𝑟𝑎𝑙 𝐶𝑎𝑝𝑖𝑡𝑎𝑙
STVA = 𝑉𝑎𝑙𝑢𝑒 𝐴𝑑𝑑𝑒𝑑
Added (STVA)

DEPENDENT VARIABLE
M𝑎𝑟𝑘𝑒𝑡 𝑉𝑎𝑙𝑢𝑒
M/B M/B = 𝐵𝑜𝑜𝑘 𝑉𝑎𝑙𝑢𝑒
𝑅𝑂𝐴+𝐶𝐴𝑅
Z-SCORE INDEX Z-SCORE = 𝞼𝑅𝑂𝐴
INSTRUMENT AND DATA TESTING

Analysis Data Descriptive Statistics

Method

Normality Test
Classical Assumption Test Autocorrelation Test
Heteroscedasticity Test
Multicolinearity Test
Hypotheses Coefficient Determination
Measurement Test (R Square)
T Test
REGRESSION MODEL

Regression Model – Firm Value Regression Model – Financial Distress

MV : 𝜶 + 𝜷𝟏 𝑽𝑨𝑰𝑪 + 𝜺 ZSCORE = 𝜶 + 𝜷𝟏 𝑽𝑨𝑰𝑪 + 𝜺

Explanation : Explanation :
• MV : Market Value (M/B) • ZSCORE : Risk of Financial Distress
• VAIC : Intellectual Capital • VAIC : Intellectual Capital
•Ε : Error •Ε : Error
SAMPLE SELECTION
NO DESCRIPTION IDN MALAY PHILIPPINE THAILAND
Banking companies
listed in IDX, BM,
1 129 48 51 30
PSE, and SET in 3
years (2015-2017)
Banking companies
that didn’t issue the
2 audited annual (36) (18) (21) (0)
report in 3 years
(2015-2017)
Banking companies
that didn’t disclose
3 (51) (0) (0) (0)
intangible asset in 3
years (2015-2017)
4 Data Outlier (6) (0) (3) (0)
Total Sample 36 30 27 30
 DESCRIPTIVE STATISTICS|
Indonesia Table 4.5 Philippine Table 4.7
Descriptive Statistics Test Result Descriptive Statistics Test Result
Indonesia Philippine
N Minimum Maximum Mean Std. Deviation N Minimum Maximum Mean Std. Deviation
3 2
VAIC 1,5 15,54 6,4101 3,11933 VAIC 1,94 236,64 57,4190 71,69724
6 7
3 2
MV 59,42 33898,79 6053,1176 750,697,092 MV 40,11 412,13 161,1261 112,49941
6 7
3 2
ZSCORE 2,36 11,47 5,6407 24,6994 ZSCORE 8,09 18,08 13,3478 2,85830
6 7
Valid N 3 Valid N 2
(listwise) 6 (listwise) 7
Source : SPSS' Output Source : SPSS' Output

Malaysia Table 4.6 Thailand Table 4.8

Descriptive Statistics Test Result Descriptive Statistics Test Result
Malaysia Thailand
N Minimum Maximum Mean Std. Deviation N Minimum Maximum Mean Std. Deviation
VAIC 30 1,25 50,65 9.1852 12,78463 VAIC 30 -,23 5,30 3,549 1,48734
MV 30 ,66 250,10 38,2951 53,43991 MV 30 2,28 32,16 7,781 8,45374
ZSCORE 30 1,56 89,40 15,0588 18,51450 ZSCORE 30 1,48 193,16 31,0192 52,7889
Valid N Valid N
30 30
(listwise) (listwise)
Source : SPSS' Output Source : SPSS' Output
CLASSICAL ASSUMPTION | Normality Test

TEST
VARIABLE TRESHOLD EXPLANATION
RESULT
MV - Indonesia ,132
ZCORE – Indonesia ,299
MV – Malaysia ,065
ZCORE – Malaysia ,326 Complies
Asymp. Sig (2-tailed) normality
MV - Philippine ,106 assumption
ZCORE – Philippine ,662
MV – Thailand ,470
ZCORE - Thailand ,470
CLASSICAL ASSUMPTION | Autocorrelation Test
VARIABLE TESTING METHOD TRESHOLD RESULT EXPLANATION
MV - Indonesia Lag Durbin Watson 1,995
ZCORE – Indonesia Durbin Watson Durbin Watson 1,850
MV – Malaysia Durbin Watson Durbin Watson 1,664
ZCORE – Malaysia Durbin Watson Durbin Watson 1,621 There is no
MV - Philippine Runs Test Asymp. Sig. (2-tailed) 0,118 autocorrelation
ZCORE – Philippine Durbin Watson Durbin Watson 1,808
MV – Thailand Runs Test Asymp. Sig. (2-tailed) 0,193
ZCORE - Thailand Durbin Watson Durbin Watson 2,077
CLASSICAL ASSUMPTION | Heteroscedasticity Test
VARIABLE TESTING METHOD TRESHOLD RESULT EXPLANATION
MV - Indonesia Spearman Test Sig. (2-tailed) 0,57
ZCORE – Indonesia Glejser Test Sig. 0,896
MV – Malaysia Glejser Test Sig. 0,264
ZCORE – Malaysia White Test R Square 0,415 There is no
MV - Philippine Spearman Test Sig. (2-tailed) 0,066 heteroscedasticity
ZCORE – Philippine Glejser Test Sig. 0,243
MV – Thailand Park Test Sig. 0,114
ZCORE - Thailand Park Test Sig. 0,114
CLASSICAL ASSUMPTION | Multicolinearity Test
VARIABLE VIF TOLERANCE EXPLANATION
MV - Indonesia 1,000 1,000
ZCORE – Indonesia 1,000 1,000
MV – Malaysia 1,000 1,000
ZCORE – Malaysia 1,000 1,000
There is no multicolinearity
MV - Philippine 1,000 1,000
ZCORE – Philippine 1,000 1,000
MV – Thailand 1,000 1,000
ZCORE - Thailand 1,000 1,000
COEFFICIENT DETERMINATION |
Model R Square
MV – Indonesia ,121
ZSCORE – Indonesia ,049
MV – Malaysia ,013
ZSCORE – Malaysia ,809
MV – Philippine ,029
ZSCORE – Philippine ,063
MV – Thailand ,777
ZSCORE – Thailand ,683
Source : SPSS' Output
HYPOTHESES TESTING | T Test (First Hypotheses)
(H1a) Firm Value - Indonesia (H1c) Firm Value - Philippine
B Beta Sig. B Beta Sig.
(Constant) 697,943 (Constant) 176,510
VAIC 835,430 ,347 ,038 VAIC -,268 -,171 ,394

VAIC’s coefficient beta is 0,347 Its significance VAIC’s coefficient beta is -0,171. Its significance
value is 0,038 < alpha (0,05). Then, the value is 0,3942 > alpha (0,05). Then, the
hypotheses (H1a) is accepted. hypotheses (H1c) is rejected.

(H1b) Firm Value - Malaysia (H1d) Firm Value - Thailand

B Beta Sig. B Beta Sig.
(Constant) 42,740 (Constant) 142,089
VAIC -,484 -,116 ,542 VAIC -31,292 -,882 ,000

VAIC’s coefficient beta is -0,116. Its significance VAIC’s coefficient beta is -0,882. Its significance
value is 0,542 > alpha (0,05). Then, the value is 0,3942 > alpha (0,05). Then, the
hypotheses (H1b) is rejected. hypotheses (H1d) is rejected.
HYPOTHESES TESTING | T Test (Second Hypotheses)
Risk of Financial Distress - Indonesia Risk of Financial Distress - Philippine
B Beta Sig. B Beta Sig.

(Constant) 6,766 (Constant) 12,774

VAIC -,176 -,222 ,194 VAIC ,010 ,250 ,208

VAIC’s coefficient beta value is -0,222. Its VAIC’s coefficient beta value is 0,250. Its
significance value is 0,194 > alpha (0,05). Then, significance value is 0,208 > alpha (0,05). Then,
the hypotheses is rejected. the hypotheses is rejected.

Risk of Financial Distress - Malaysia Risk of Financial Distress - Thailand

B Beta Sig. B Beta Sig.

(Constant) 3,098 (Constant) 24,461

VAIC 1,302 ,899 ,000 VAIC -4,699 -,827 ,000

VAIC’s coefficient beta value is 0,899. Its VAIC’s coefficient beta value is -0,827. Its
significance value is 0,000 < alpha (0,05). Then, significance value is 0,000 < alpha (0,05). Then,
the hypotheses is rejected. the hypotheses is accepted.
RESEARCH DISCUSSION
Intellectual Capital positively influence Firm Value in Indonesia

The relation of intellectual capital has a

positive effect towards firm value in Indonesia.
Based on the result, it is in line with the
Resources Based Theory that stated better
human resources which is an apart of
Intellectual Capital will leads to the higher
company’s productivity. The management of
Intellectual Capital plays a role in increasing
the value of company so that the company can
continue to grow and increase the company’s
added value to compete.
In line with the research conducted by
Chen et. al. (2005), Nikmah and
Irsyahma (2016).
RESEARCH DISCUSSION
Intellectual Capital did not influence Firm Value in Malaysia and Philippine

Firm Value of company cannot directly

influenced by Intellectual Capital. It means
that the company does not have the ability to
use the intellectual capital properly.

The result indicate that intellectual capital

owned by a company may not affecting in
creating fine points in the stakeholder’s point
of view (Khasanah, 2016), .

In line with the research conducted by

Iranmahd et. al. (2014), Sunarsih and Mendra (2012),
Khanqah et. al. (2012), and Suhendra (2015)
RESEARCH DISCUSSION
Intellectual Capital negatively influence Firm Value in Thailand

Investors allegedly did not respond to

information about intellectual capital because
investors believed that the value of the
company was influenced by factors outside of
intellectual capital.

Meanwhile, the company management

considers that it does not really consider the
importance of Intellectual Capital in increasing
the value of the company.

In line with the research conducted by

Lestari (2017)
RESEARCH DISCUSSION
Intellectual Capital has no positive influence Risk of Financial Distress in Indonesia and
Philippine

The high number of intellectual capital does

not mean that bank far from risk of financial
distress. This can happen because intellectual
capital is not the only factor which affect risk
of financial distress.

There is an indication that the use of physical

and financial assets still dominate in contribute
to the financial performance of the company.

In line with the research conducted by

Maditonos et. al (2011) and Mehralian et. al. (2012).
RESEARCH DISCUSSION
Intellectual Capital negatively influence Risk of Financial Distress in Malaysia

The high number of intellectual capital lead to

the high risk of financial distress. This indicates
that the use of intangible assets in Malaysia
banking companies has not been used
effectively and efficiently so as to give a
negative influence on company performance
which can predict the condition of companies
on the future to be at high risk of financial
distress.

In line with the research conducted by

Andriana (2014).
RESEARCH DISCUSSION
Intellectual Capital positively influence Risk of Financial Distress in Thailand

The higher value of Intellectual Capital, the

bank is further away from the risk of financial
distress. Intellectual capital owned by the
company is able to keep the company away
from the condition of financial distress.

In line with the research conducted by

Ardalan and Askarian (2014), Pour et. al. (2014), and
Ulum (2008).
CONCLUSIONS
The results from the research shows that…

1. Intellectual capital positively influences firm

value banking companies in Indonesia, but it
does not influences firm value banking
companies in Malaysia, Philippine, and
Thailand.
2. Intellectual capital positively influences on
risk of financial distress banking companies
in Thailand and shows negative influences on
risk of financial distress banking companies
in Malaysia, but it does not influences
banking companies in Indonesia and
Philippine.
SUGGESTIONS

1. Add up the other variables that are thought

to have an influence on a firm value and risk
of financial distress.
2. Add up the number of samples to be
broader.
3. Use other measurement for dependent
and/or independent variable
 Q.S. TAHA : 114
“OH ALLAH, INCREASE ME IN KNOWLEDGE”