Pertanika Journal of Social Sciences & Humanities
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Pertanika · Universiti Putra Malaysia Press

Pertanika Journal of Social Sciences & Humanities

Official journal of Universiti Putra Malaysia for scholarly work across the social sciences, humanities and related interdisciplinary fields.

e-ISSN 2231-8534 ISSN 0128-7702
Research article

The Interrelationship between Intellectual Capital and Financial Performance: A Case Study of Indonesian Insurance Companies

Hidayat, C., Putong, I. and Puspokusumo, R. A. A. W.

KeywordsIntellectual Capital, Human Capital Efficiency, Structural Capital Efficiency, Physical Employed Efficiency, Financial Performance, Canonical Model, Granger Causality Model
Article content

Abstract

This study aims to confirm the interrelationship between intellectual capital and financial performance by examining 9 (nine) public-listed Indonesian insurance companies' financial statements from 2009 to 2013. Through this, it expects to determine which variables were more influential to intellectual capital and financial performance using secondary, time series, and panel data. Based on Canonical analysis results, the dominant influence on the financial performance of intellectual capital rather than vice versa. Granger causality analysis results indicate that all the variables of intellectual capital and financial performance can be mutually influential. Not all variables have a significant influence one with another. The variables that have significant influence among one another is HCE to ROA, ROE to SCE, and ROA to ROE (not vice versa). It shows that for the case of Indonesian, insurance company's financial performance has more dominant effect than intellectual capital.