Abstract:
The purpose of this paper was to examine empirically how the intellectual capital which has three components (human capita, structural capital, and capital employee) affects company’s value creating efficiency. This study would examine that intellectual capital should be viewed as valuable assets that may significantly have an impact on firm’s profitability. The study using the data obtained from the Indonesia Stock Exchange (ISX) of 2008 – 2012, by implementing purposive sampling method consisting 50 financial institutions as sample. The firm intellectual capital was measured using tool proposed by Ante Pulic which is also developed by Ulum study called Value Added Intellectual Capital (VAIC). There are three components of intellectual capital as developed by Pulic which are value added human capital (VAHU), value added structural capital (STVA), and value added capital employed (VACA). The effect of intellectual capital on firms’ performance is measured by financial ratios such as return on equity (ROE), and earning per share (EPS). This paper would show the effect of each elements of intellectual capital on each of return on equity (ROE) and earning per share (EPS).
