Abstract:
This research aims to assess the influence of intellectual capital, company size, and
composition of capital structure towards the value of the companies, both directly and
indirectly with financial performance as a mediating variable. Researchers employed
structural equation modelling (SEM) approach to measure direct and indirect influence among variables researched. The research was conducted on the non-oil and gas manufacturing companies because there is a declining contribution of this sector on Indonesia’s GDP. The population for the non-oil and gas manufacturing companies listed the Indonesia Stock Exchange (IDX) is 177 companies, the top 50 companies are then taken as the sample of this research during the period 2014-2018. The research shows that intellectual capital affected financial performance, while the size of the company and the capital structure did not. Furthermore, financial performance, intellectual capital and capital structure influenced the value of the company directly, it is not the case for the size of the company. They key findings of this research is that intellectual capital has significant influence directly and indirectly towards the value of the companies, the better intellectual capital, the higher the value and vice versa. The contribution of this research unveils the answer of the question lingering in public sphere, why import on manufacturing products is increasing, one of the factors is low competitiveness of intellectual capital of Indonesia’s non-oil and gas manufacturing sector.
