IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v9y2025i1p3390-3405.html
   My bibliography  Save this article

Intellectual Capital Effects on Firm’s Profitability with Industry Types as Moderating Variable

Author

Listed:
  • Mila Austria Reyes

    (Accounting Department, Faculty of Business, President University)

  • Monika Kussetya Ciptani

    (Accounting Department, Faculty of Business, President University)

  • Teuku Ismail Fahmi

    (Accounting Department, Faculty of Business, President University)

Abstract

Intellectual Capital has become one of the essential components for companies to be able to generate value in this era of knowledge. With the different activities, markets, needs and goals in each industry, companies have difficulties in generating value using its Intellectual Capital they have. The ability of companies to utilize their Intellectual Capital, may increase investor’s confidence in the perceived value of the company. Although many studies have been done but empirical research still shows some inconsistencies. The purpose of this research is to examine whether intellectual capital affects a company’s predicted profitability based on its return on assets (ROA), with the type of industry as moderating variable. This quantitative research was designed using total of 645 samples consisting of 129 companies divided into 10 types of industries over a five-year period (2018-2022) in Indonesia. According to the research, Intellectual Capital and its two components (Human Capital and Structural Capital), have a positive and significant influence on ROA, but Capital Employed does not have a significant impact on ROA. While the Industry Types moderates the relationship of ROA to Intellectual Capital and Human Capital. The limitation in this study is that it does not cover 5 industries out of a total of 15 types of Capital Intellectual High industries due to the lack or absence of companies in such industries on the Indonesian Stock Exchange. Despite these constraints, industry practitioners included in the sample need to pay attention to Intellectual Capital and its components as it is beneficial in order to generate a return for the company. This research also contributed to the literature of Intellectual Capital by introducing a moderation variable of the type of industry that can add new insights related to the role of Intelligent Capital in the respective types of industry.

Suggested Citation

  • Mila Austria Reyes & Monika Kussetya Ciptani & Teuku Ismail Fahmi, 2025. "Intellectual Capital Effects on Firm’s Profitability with Industry Types as Moderating Variable," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(1), pages 3390-3405, January.
    • Handle: RePEc:bcp:journl:v:9:y:2025:i:1:p:3390-3405
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-9-issue-1/3390-3405.pdf
    Download Restriction: no
    File URL: https://rsisinternational.org/journals/ijriss/articles/intellectual-capital-effects-on-firms-profitability-with-industry-types-as-moderating-variable/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nasif Ozkan & Sinan Cakan & Murad Kayacan, 2017. "Intellectual capital and financial performance: A study of the Turkish Banking Sector," Borsa Istanbul Review, Research and Business Development Department, Borsa Istanbul, vol. 17(3), pages 190-198, September.
    2. Santi Gopal Maji & Mitra Goswami, 2017. "Intellectual capital and firm performance in India: a comparative study between original and modified value added intellectual coefficient model," International Journal of Learning and Intellectual Capital, Inderscience Enterprises Ltd, vol. 14(1), pages 76-89.
    3. Elisabetta Raguseo & Claudio Vitari & Federico Pigni, 2020. "Profiting from big data analytics: The moderating roles of industry concentration and firm size," Post-Print hal-03032504, HAL.
    4. Ivana Blažková & Ondřej Dvouletý, 2018. "The causes of firm performance variation in the Czech food processing industry in the context of the outlier effect," Management Research Review, Emerald Group Publishing Limited, vol. 41(8), pages 968-986, April.
    5. Boujelbene, Mohamed, 2013. "The impact of intellectual capital disclosure on cost of equity capital: A case of French firms," Journal of Economics, Finance and Administrative Science, Universidad ESAN, vol. 18(34), pages 45-53.
    6. Radiojecic, Tamara & Krstic, Bojan, 2017. "Intellectual Capital in the Theory of the Firm," Ekonomika, Journal for Economic Theory and Practice and Social Issues, Society of Economists Ekonomika, Nis, Serbia, vol. 63(4), December.
    7. Joseph Mensah Onumah & King Carl Tornam Duho, 2019. "Intellectual Capital: Its Impact on Financial Performance and Financial Stability of Ghanaian Banks," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 5(3), pages 243-268, July.
    8. Carlos M Jardon & Xavier Martinez-Cobas, 2021. "Measuring intellectual capital with financial data," PLOS ONE, Public Library of Science, vol. 16(5), pages 1-19, May.
    9. A.A. Ousama & A.H. Fatima, 2015. "Intellectual capital and financial performance of Islamic banks," International Journal of Learning and Intellectual Capital, Inderscience Enterprises Ltd, vol. 12(1), pages 1-15.
    10. Muhammad Nadeem & Christopher Gan & Cuong Nguyen, 2018. "The Importance of Intellectual Capital for Firm Performance: Evidence from Australia," Australian Accounting Review, CPA Australia, vol. 28(3), pages 334-344, September.
    11. Tasawar Nawaz & Roszaini Haniffa, 2017. "Determinants of financial performance of Islamic banks: an intellectual capital perspective," Journal of Islamic Accounting and Business Research, Emerald Group Publishing Limited, vol. 8(2), pages 130-142, April.
    12. Elisabetta Raguseo & Claudio Vitari & Federico Pigni, 2020. "Profiting from big data analytics: The moderating roles of industry concentration and firm size," Post-Print hal-03511381, HAL.
    13. Raguseo, Elisabetta & Vitari, Claudio & Pigni, Federico, 2020. "Profiting from big data analytics: The moderating roles of industry concentration and firm size," International Journal of Production Economics, Elsevier, vol. 229(C).
    14. Dranove, David, 2011. "Health Care Markets, Regulators, and Certifiers," Handbook of Health Economics, in: Mark V. Pauly & Thomas G. Mcguire & Pedro P. Barros (ed.), Handbook of Health Economics, volume 2, chapter 0, pages 639-690, Elsevier.
    15. Elisabetta Raguseo & Claudio Vitari & Federico Pigni, 2020. "Profiting from big data analytics: The moderating roles of industry concentration and firm size," Grenoble Ecole de Management (Post-Print) hal-03032504, HAL.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hossein Tarighi & Zeynab Nourbakhsh Hosseiny & Mohammad Reza Abbaszadeh & Grzegorz Zimon & Darya Haghighat, 2022. "How Do Financial Distress Risk and Related Party Transactions Affect Financial Reporting Quality? Empirical Evidence from Iran," Risks, MDPI, vol. 10(3), pages 1-23, February.
    2. Abdul-Hamid, Asma-Qamaliah & Ali, Mohd Helmi & Osman, Lokhman Hakim & Tseng, Ming-Lang & Lim, Ming K., 2022. "Industry 4.0 quasi-effect between circular economy and sustainability: Palm oil industry," International Journal of Production Economics, Elsevier, vol. 253(C).
    3. Saeed, Abubakr & Riaz, Hammad & Baloch, Muhammad Saad, 2022. "Does big data utilization improve firm legitimacy?," Technological Forecasting and Social Change, Elsevier, vol. 182(C).
    4. Ponta, Linda & Puliga, Gloria & Manzini, Raffaella & Cincotti, Silvano, 2022. "Sustainability-oriented innovation and co-patenting role in agri-food sector: Empirical analysis with patents," Technological Forecasting and Social Change, Elsevier, vol. 178(C).
    5. Oleksandr Melnychenko, 2020. "Is Artificial Intelligence Ready to Assess an Enterprise’s Financial Security?," JRFM, MDPI, vol. 13(9), pages 1-19, August.
    6. Bodendorf, Frank & Xie, Qiao & Merkl, Philipp & Franke, Jörg, 2022. "A multi-perspective approach to support collaborative cost management in supplier-buyer dyads," International Journal of Production Economics, Elsevier, vol. 245(C).
    7. Monika Barak & Rakesh Kumar Sharma, 2024. "Does intellectual capital impact the financial performance of Indian public sector banks? An empirical analysis using GMM," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-11, December.
    8. Mehmet Asutay & Ubaidillah, 2024. "Examining the Impact of Intellectual Capital Performance on Financial Performance in Islamic Banks," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 1231-1263, March.
    9. Md. Sohel Rana & Syed Zabid Hossain, 2023. "Intellectual Capital, Firm Performance, and Sustainable Growth: A Study on DSE-Listed Nonfinancial Companies in Bangladesh," Sustainability, MDPI, vol. 15(9), pages 1-23, April.
    10. Nguyet Thi Nguyen, 2023. "The Impact of Intellectual Capital on Service Firm Financial Performance in Emerging Countries: The Case of Vietnam," Sustainability, MDPI, vol. 15(9), pages 1-19, April.
    11. Dat T. Nguyen & Tu D. Q. Le & Tin H. Ho, 2021. "Intellectual Capital and Bank Risk in Vietnam—A Quantile Regression Approach," JRFM, MDPI, vol. 14(1), pages 1-15, January.
    12. Ummu Salma Al-Azizah & Bagus Pamungkas Wibowo, 2023. "Impact of Intellectual Capital on Financial Performance: Panel Evidence from Banking Industry in Indonesia," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 51-65.
    13. Atta Ullah & Chen Pinglu & Saif Ullah & Ningyu Qian & Mubasher Zaman, 2023. "Impact of intellectual capital efficiency on financial stability in banks: Insights from an emerging economy," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 1858-1871, April.
    14. Syed Quaid Ali Shah & Fong-Woon Lai & Muhammad Kashif Shad & Zdeňka Konečná & Feybi Ariani Goni & Abdoulmohammad Gholamzadeh Chofreh & Jiří Jaromír Klemeš, 2021. "The Inclusion of Intellectual Capital into the Green Board Committee to Enhance Firm Performance," Sustainability, MDPI, vol. 13(19), pages 1-21, September.
    15. Md Nur Nabi & Qijie Gao & Md Takibur Rahman & Shaun O. Britton & Mohammad Muzahidul Islam, 2020. "Intellectual Capital and Corporate Performance: Evidence From Banking Industry of Bangladesh," International Journal of Human Resource Studies, Macrothink Institute, vol. 10(1), pages 234259-2342, December.
    16. Vo, Duc, 2018. "Should Bankers Be Concerned with Intellectual Capital? A Study of the Thai Banking Sector," MPRA Paper 103275, University Library of Munich, Germany.
    17. Md. Mominur Rahman & Bilkis Akhter, 2021. "The impact of investment in human capital on bank performance: evidence from Bangladesh," Future Business Journal, Springer, vol. 7(1), pages 1-13, December.
    18. Nurul Nadzirah Abdul Nasir & Surita Hartini Mat Hassan & Ramlan Mustapha & Mohd Kamal Azman Jusoh, 2024. "Awareness to Use Islamic Banking Products and Services among Non-Muslim Consumers in Malaysia: A Nominal Group Technique Approach," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(12), pages 2385-2395, December.
    19. Eze, Solomon Uchechukwu & Akam, Godwin Uche & Okeke, M. C, 2022. "Entrepreneurial Skill Acquisition and Human Capital Development of State Universities Students in South-East, Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(12), pages 571-578, December.
    20. Pan, Jay & Qin, Xuezheng & Li, Qian & Messina, Joseph P. & Delamater, Paul L., 2015. "Does hospital competition improve health care delivery in China?," China Economic Review, Elsevier, vol. 33(C), pages 179-199.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:9:y:2025:i:1:p:3390-3405. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.