Title: Does managerial ability play a role in increasing the value relevance of intellectual capital?

Authors: Sri Ruwanti; Iman Harymawan

Addresses: Faculty of Economics and Business, Universitas Airlangga, Surabaya, Indonesia; Faculty of Maritime Economics and Business, Universitas Maritim Raja Ali Haji, Tanjungpinang, Indonesia ' Faculty of Economics and Business, Universitas Airlangga, Surabaya, Indonesia

Abstract: This study aims to examine the value relevance of intellectual capital (IC) and role of managerial ability increasing the value relevance of IC. This study uses 640 observations from 128 manufacturing companies listed on the Indonesia Stock Exchange in the period of 2016 to 2020. The sub-categories of IC used are human capital, relational capital, process capital and innovation capital. Value relevance refers to Ohlson's (1995) model. The findings of this study suggest that only process capital has value relevance. It also finds that managerial ability only plays a role in strengthening the relationship between human capital and firm value. On the other hand, it plays a less role in other IC sub-categories.

Keywords: intellectual capital; firm value; managerial ability; market value.

DOI: 10.1504/IJLIC.2024.136383

International Journal of Learning and Intellectual Capital, 2024 Vol.21 No.1, pp.45 - 59

Received: 30 Jun 2022
Accepted: 22 Mar 2023
Published online: 31 Jan 2024 *

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