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Intellectual Capital, Political Connection, and Firm Performance: Exploring from Indonesia

Author

Listed:
  • Suham Cahyono

    (Department of Accountancy, Faculty of Economics and Business, Universitas Airlangga, Surabaya 60115, Indonesia)

  • Ardianto Ardianto

    (Department of Accountancy, Faculty of Economics and Business, Universitas Airlangga, Surabaya 60115, Indonesia)

Abstract

The relationship between intellectual capital and firm performance represents a critical facet of corporate governance, warranting comprehensive investigation. By analyzing data from 1151 non-financial firms listed on the Indonesia Stock Exchange over the period from 2018 to 2022, the authors utilize fixed effect regression analysis to test their hypothesis. This study’s findings reveal a positive and significant relationship between intellectual capital and firm performance. Additionally, the interaction model incorporating political connections yields statistically significant results, indicating that political connections can moderate the relationship between intellectual capital and firm performance. This study makes a substantial contribution to the literature, particularly by advancing the understanding of corporate governance through the lens of intellectual capital’s influence on firm performance. It offers both theoretical and practical insights into the Indonesian context, highlighting the moderating role of political connections. Notably, this study is the first to incorporate interaction models to assess the impact of political connections on this relationship.

Suggested Citation

  • Suham Cahyono & Ardianto Ardianto, 2024. "Intellectual Capital, Political Connection, and Firm Performance: Exploring from Indonesia," Risks, MDPI, vol. 12(7), pages 1-16, June.
  • Handle: RePEc:gam:jrisks:v:12:y:2024:i:7:p:105-:d:1421034
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    References listed on IDEAS

    as
    1. Md. Jahidur Rahman & Hongyi Liu, 2023. "Intellectual capital and firm performance: the moderating effect of auditor characteristics," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 31(4), pages 522-558, April.
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