Intellectual Capital and Financial Sustainability

I Gede Cahyadi Putra; Ni Luh Putu Wiagustini; I Wayan Ramantha; Ida Bagus Panji Sedana

doi:10.32535/ijafap.v5i2.1590

Intellectual Capital and Financial Sustainability

I Gede Cahyadi Putra, Ni Luh Putu Wiagustini, I Wayan Ramantha, Ida Bagus Panji Sedana

Abstract

The competition among companies in the industrial era 4.0 no longer relies on ownership of tangible assets but on the ability to control information, develop innovation, manage organizations and own resources. Companies increasingly emphasize the importance of knowledge assets to improve their performance and sustainability. The purpose of this study is to figure out the effect of intellectual capital, consisting of human capital, structural capital and relational capital on marketing performance, financial strategy performance and financial sustainability. The research was conducted in rural banks, which also known as Bank Perkeditan Rakyat (BPR) operating in Bali. The data analysis technique used SEM PLS. The results showed that human capital and relational capital positively effects marketing performance, financial strategy performance and financial sustainability. Meanwhile, the relational capital variable does not have effect on financial strategy performance and financial sustainability.

Keywords: Financial Strategy Performance, Financial Sustainability, Intellectual Capital, Marketing Performance, Rural Bank

Full Text:

PDF

References

Adams, M., Thornton, B., & Sepehri, M. (2010). The impact of the pursuit of sustainability on the financial performance of the firm. Journal of Sustainability and Green Business, 1(1), 24-32.

Ahangar, R. G. (2011). The relationship between intellectual capital and financial performance: An empirical investigation in an Iranian company. African Journal of Business Management, 5(1), 88-95.

Al Amin, M. (2012). Pengaruh firm size terhadap hubungan intellectual capital dengan kinerja perusahaan (Studi empiris pada perusahaan yang terdaftar di BEI 2001-2010). Jurnal Ekonomi dan Pembangunan OPTIMUM, 1(2), 1-23.

Almilia, L. S., Shonhadji, N., & Angraini, A. (2009). Faktor-faktor yang mempengaruhi financial sustainability ratio pada bank umum swasta nasional non devisa periode 1995-2005. Jurnal Akuntansi dan Keuangan, 11(1), 42-52.

Bagozzi, R. P. (1980). Casual models in marketing. New York: Wiley.

Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120.

Barney, J. B., & Clark, D. N. (2007). Resource-based theory creating and sustaining competitive advantages. Oxford: Oxford University Press.

Bentoen, S. (2012). Pengaruh intellectual capital terhadap financial performance, growth, dan market value (Bachelor Thesis). Surabaya: Universitas Pelita Harapan.

Bontis, N. (2000). Assessing knowledge assets: A review of the models used to measure intellectual capital. International Journal of Management Reviews, 3(1), 41-58.

Bontis, N., Keow, W. C. C., & Richardson, S. (2000). Intellectual capital and business performance in Malaysia industries. Journal of Intellectual Capital, 1(1), 85-100.

Bounfour, A., & Edvinsson, L. (2005). Intellectual capital for communities nations, regions, and cities. Oxford: Butterworth-Heinemann.

Bramhandkar, A., Erickson, S., & Applebee, I. (2007). Intellectual capital and organizational performance: An empirical study of the pharmaceutical industry. The Electronic Journal of Knowledge Management, 5(4), 357-362.

Cabrita, M., & Bontis, N. (2008). Intellectual capital and business performance in The Portuguese Banking industry. International Journal Technology Management, 43 (1-3), 212-237.

Chang, H. S., Chen, C. H., & Ho, T. C. (2012). A study of marketing performance evaluation system for notebook distributors. International Journal of Business and Management, 7(13), 85-93.

Chang, W. S., & Hsieh, J. J. (2011). Exploring a human capital driven intellectual capital framework: Evidence from information technology industry in Taiwan. European Journal of Social Sciences, 21(3), 392-404.

Chatzkel, J. (2002). A conversation with GÃ¶ran Roos. Journal of Intellectual Capital, 3(2), 96-117.

Chen, M. C., Cheng, S. J., & Hwang, Y. (2005). An empirical investigation of relationship between intellectual capital and firms' market value and financial performance. Journal of Intellectual Capital, 6(2), 159-176.

Clarke, M., Seng, D., & Whiting, R. H. (2011). Intellectual capital and firm performance in Australia. Journal of Intellectual Capital, 12(4), 505-530.

Fazlagic, A. (2013). Measuring the intellectual capital of a university. Paper presented at Conference on Trends in Management of Human Resources in Higher Education, Poland, 1-9.

Febrian, A., Sukresna, I., & Ghozali, I. (2020). Relational capital and marketing performance: The mediating role of SMEs networking in Indonesia. Management Science Letters, 10(14), 3405-3412.

Firer, S., & Williams, S. M. (2003). Intellectual capital and traditional measures of corporate performance. Journal of Intellectual Capital, 4(3), 348-360.

Gates, S., & Langevin, P. (2010). Human capital measures, strategy and performance: HR managers' perceptions. Accounting, Auditing & Accountability Journal, 23(1), 111-132.

Grant, R. M. (1991). The resource-based theory of competitive advantage: Implications for strategy formulation. California Management Review, 33(3), 114-135.

Guerrini, A., Romano, G., & Leardini, C. (2014). Does intellectual capital efficiency affect financial performance? The case of Italian listed firms. International Journal Learning and Intellectual Capital, 11(2), 127-148.

Gunasekaran, A., Okko, P., Martikainen, T., & Yli-Olli, P. (1996). Improving productivity and quality in small and medium enterprises: Cases and analysis. International Small Business Journal, 15(1), 59-72.

Guntz, S. (2011). Sustainability and profitability of microfinance institutions. CAIFD-Center for Applied International Finance and Development, Research Paper, 4.

Han, T. S., Lin, C. Y. Y., Chen, C., YI, M., & Yeh, C. (2008). Developing human capital indicators: A three way approach. International Journal of Learning and Intellectual Capital, 5(3), 387-403.

Idowu, A., & Ogundipe, S. E. (2013). Relational capital and business performance of female-owned small scale enterprises in Nigeria. Journal of Economics and Sustainable Development, 4(8), 84-88.

Jardon, C., & Martos, M. S. (2009). Intellectual capital and performance in wood industries of Argentina. Journal of Intellectual Capital, 10(4), 600-616.

Jardon, C., & Martos, M. S. (2012). Intellectual capital as a competitive advantage in emerging clusters in Latin America. Journal of Intellectual Capital, 13(4), 462-481.

Kamukama, N., Ahiauzu, A., & Ntayi, J. M. (2010). Intellectual capital and performance: Testing interaction effects. Journal of Intellectual Capital, 11(4), 554-574.

Khan, M. Z. A., & Park, J. H. (2020). Retraction: The effect of human capital on performance of East African commercial banks. Banks and Bank Systems, 15(2), 56-66.

Khanqah, V. T., Khosroshahi, M. A., & Ghanavati, E. (2012). An empirical investigation of the impact of intellectual capital on firms' market value and financial performance: Evidence from Iranian Companies. International Journal of Management Business Research, 2(1), 1-12.

Komnenic, B., & Pokrajcic, D. (2012). Intellectual capital and corporate performance of MNCs in Serbia. Journal of Intellectual Capital, 13(1), 106-119.

Kouhzadi, F., MirHesami, A., Rashidi, Y., & Kouhzadi, M. (2019). Statistical-based analysis on effects of the dimensions of human capital on marketing capabilities in private banks. International Transaction Journal of Engineering Management & Applied Sciences & Technologies, 10(1), 73-79.

Lee, T. S., & Tsai, S. H. J. (2005). The effect of business operation mode on market orientation, learning orientation and innovativeness. Industrial Management & Data System, 105(3), 325-348.

Leon, P. (2001). Four pillars of financial sustainability. Arlington, Va: Nature Conservancy.

Liebowitz, J., & Suen, C. (2000). Developing knowledge management metrics for measuring intellectual capital. Journal of Intellectual Capital, 1(1), 54-67.

Lin, C. Y., & Chen, M. Y. (2007). Does innovation lead to performance? An empirical study of SMEs in Taiwan. Management Research News, 30(2), 115-132.

Marr, B., Gray, D., Neely, A. (2003). Why do firms measure their intellectual capital? Journal of Intellectual capital, 4(4), 441-464.

Mayo, A. (2000). The role of employee development in the growth of intellectual capital. Personal Review, 29(4), 521-533.

Mubarik, M. S., Devadason, E. S., & Govindaraju, C. (2020). Human capital and export performance of small and medium enterprises in Pakistan. International Journal of Social Economics, 47(5), 643-662.

Naz, F., Salim, S., Rehman, R. U., Ahmad, M. I., & Ali, R. (2019). Determinants of financial stability of microfinance institutions in Pakistan. Upravlenets, 10(4), 51â€“64.

Nuryakin., & Ardyan, E. (2018). SMEs' marketing performance: The mediating role of market entry capability. Journal of Research in Marketing and Entrepreneurship, 20(2), 122-146.

Odalo, S. K., Njuguna, A., & Achoki, G. (2016). Relating sales growth and financial performance in agricultural firms listed in the Nairobi securities exchange in Kenya. International Journal of Economics, Commerce and Management, 4(7), 443-454.

Ozkan, N., Cakan, S., & Kayacan, M. (2016). Intellectual capital and financial performance: A Study of the Turkish banking sector. Borsa Istanbul Review, 17(3), 190-198.

Pablos, P. O. (2003). Intellectual capital reporting in Spain: A comparative view. Journal of Intellectual Capital, 4(1), 61-81.

Prasetyaningtyas, S. W., Maarif, S., Sobir, R., & Hermawan, A. (2019). The use of soft system methodology in evaluating the business strategies in organic farming: The case from Yogyakarta, Indonesia. Asia Pasific Journal of Management and Education, 2(2), 1-11

Puntillo, P. (2009). Intellectual capital and business performance: Evident from Italian Banking Industry. Journal of Corporate Finance, 5(12), 96-115.

Roca-Puig, V., Beltran-Martin, I., & Cipres, M. S. (2012). Combined effects of human capital, temporary employment and organizational size on firm performance. Personnel Review, 41(1), 4-22.

Saeko, A. N., Chuntarung., & Thoumrungroje, P. (2012). The impact of integrated marketing strategy on marketing performance: An empirical evidence from exporting business in Thailand. International Journal of Business Strategy, 12(4), 56-73.

Sharabati, A. A. A., Jawad, S. N., & Bontis, N. (2010). Intellectual capital and business performance in the pharmaceutical sector of Jordan. Management Decision, 48(1), 105-131.

Sheikh, H. I., & Wepukhulu, J. M. (2019). Effect of intellectual capital efficiency on financial sustainability of Savings and Credit Cooperative Societies in Nairobi County, Kenya. International Academic Journal of Economics and Finance, 3(4), 16-31.

Stewart, T. (2002). Intellectual capital: The new wealth of organizations. New York: Nicholas Brealey Publishing.

St-Pierre, J., & Audet, J. (2011). Intangible asset and performance: Analysis on manufacturing SMEs. Journal of Intellectual Capital, 12(2), 202-223.

Subramony, M., Segers, J., Chadwick, C., & Shyamsunder, A. (2018). Leadership development practice bundles and organizational performance: The mediating role of human capital and social capital. Journal of Business Research, 83, 120-129.

Tayles, M., Pike, R. H., & Sofian, S. (2007). Intellectual capital, management accounting practice and corporate performance. Accounting, Auditing & Accountability Journal, 20(4), 522-548.

Xu, J., & Li, J. (2019). The impact of intellectual capital on SMEs' performance in China: Empirical evidence from non-high-tech vs. high-tech SMEs. Journal of Intellectual Capital, 20(4), 488-509.

Xu, J., Haris, M., & Yao. (2019). Should listed banks be concerned with intellectual capital in emerging Asian markets? A comparison between China and Pakistan. Sustainability, 11(23), 1-23.

Zhou, J., Mavondo, F., & Saunders, S. G. (2019). The relationship between marketing agility and financial performance under different levels of market turbulence. Industrial Marketing Management, 83, 31-41.

DOI: https://doi.org/10.32535/ijafap.v5i2.1590