Intellectual capital and firm productivity: evidence from Indonesian commercial banks

This study investigates the connection between intellectual capital and firm productivity. Intellectual capital, represented by the value-added intellectual capital-coefficient, human capital efficiency, structural capital efficiency, and capital employed efficiency, influences the employee productivity and asset turnover of banks, which are measures of productivity. Utilising purposive sampling between 2017 and 2019, 35 banks listed on the Indonesia Stock Exchange were sampled. Using Eviews, panel data are analysed in this study. According to the study, the value-added intellectual capital-coefficient increases banks' productivity and asset turnover. Human capital efficacy increased employee productivity, but not asset turnover. Capital efficiency influences the output of personnel and the turnover of assets. The efficiency of capital deployed reduces employee output and has little effect on asset turnover. According to the study, investing in intellectual capital increases bank productivity. The implication of this study is that intellectual capital produces bank productivity, which benefits both the domestic and international economies.