The Effect of External Sourcing on The Financial Performance of Manufacturing Companies Listed in Indonesia Stock Exchange (BEI)

Abstract

The purpose of this study is to empirically examine the influence of intellectual capital proxied by human capital, structural capital, and physical capital which can affect the company’s financial performances measured by return on equity (ROE), earning per share (EPS), and operational profit margin (OPM). The population of this research is companies listed in Indonesia Stock Exchange period 2007-2011 and meet the criteria for the samples in this study. The sample selection is using purposive sampling method and obtained 60 companies as the samples. The results are as follow: intellec- tual capital (VAICTM) significantly affects the financial performance of the return on equity (ROE) and operational profit margin (OPM) variables reinforced the com- pany’s modest size, while the intellectual capital (VAICTM) has no affect on earning per share (EPS).