Universitas Diponegoro Semarang


Universitas Diponegoro Semarang


The objective of this study is to investigate influence of firm’s intellectual capital (IC) on their financial performance. This paper uses the Pulic Framework and data from 73 publicly listed companies between the years 2003 and 2005 on the Indonesia Stock Exchange except financial industry. This study uses partial least square (PLS) for data analysis. Three elements of IC and company performances are tested by this study.

The results show that IC and company performance are not positively related, IC is not correlated to future company performance, the rate of growth of a company’s IC is not positively related to the company’s performance and the contribution of IC to company performance differs by industry. The results help to embolden modern day managers to better harness and manage IC.

Keywords: Intellectual Capital, Performance, Partial Least Square (PLS)

I. Background
Globalization, technological innovation and business competition is tight in this century has forced companies to change their way of doing business. In order for the company continue to survive, companies must quickly change its strategy from a business that is based on labor (labor-based business) towards knowledge-based business (business based on knowledge), so the main characteristics of the company into a science-based company. Along with economic changes that characterized the knowledge-based economy with the implementation of knowledge management (knowledge management), the prosperity of a company will rely on a transformation of creation and capitalization of knowledge itself (Sawarjuwono, 2003)


(Simposium Nasional Akuntansi 11)

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