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The Relationship between Innovation Capital, Firm Value, and Firm Risk

Author

Listed:
  • Aditya, Arya Aji

    (Universitas Airlangga)

  • Kaswar, Andi Rahmat

    (Universitas Airlangga)

Abstract

The purpose of this study is to examine two relationships: (1) innovation capital and firm value; and (2) innovation capital and firm risk. The population of this study was all companies listed on the Indonesia Stock Exchange from 2016-2020, and the required research sample was drawn using a purposive sampling technique. Data analysis technique used multiple linear regression. The result revealed that innovation capital had a positive and statistically significant effect on firm value, but innovation capital had a negative and insignificant relationship on firm risk. Based on the analysis, it can be concluded that innovation capital has a potential factor to increase company's value, only if companies have a competitive advantage by disclosing the R&D costs and investments in their financial statements. Because of each company is unique, innovation capital is not always related to a systematic risk measurement.

Suggested Citation

  • Aditya, Arya Aji & Kaswar, Andi Rahmat, 2022. "The Relationship between Innovation Capital, Firm Value, and Firm Risk," EkBis: Jurnal Ekonomi dan Bisnis, UIN Sunan Kalijaga Yogyakarta, vol. 6(1), pages 74-86, July.
    • Handle: RePEc:ris:ekbisj:1558
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    More about this item

    Keywords

    Innovation capital; Firm value; Firm risk;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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