The Effect of Intellectual Capital and Corporate Governance on Company Performance and its Impact on Firm Value

Abstract

Firm value is a condition the company has achieved, which is reflected in its share price and gains investors’ trust for all its achievements. This study examines the effect of intellectual capital and corporate governance on firm value and tests whether company performance can mediate the relationship between intellectual capital and corporate governance on firm value. The population in this study are all banking companies listed on the Indonesia Stock Exchange in 2015-2019. The sample was determined using a purposive sampling technique with certain criteria so that 26 companies were selected as samples with a total data of 130 companies. The analysis technique in this study is path analysis using Structural Equation Modeling based on Partial Least Square. The study results show that intellectual capital and corporate governance affect company performance. Intellectual capital does not affect firm value. Company performance and corporate governance affect firm value. Furthermore, company performance can mediate the relationship between intellectual capital and firm value but does not mediate the relationship between corporate governance and firm value Keywords: intellectual capital, corporate governance, company performance, firm value