The Role of Innovation and Intellectual Capital in Improving Company Performance

Main Article Content

Maria Natasya Duka
Christiana Fara Dharmastuti

Abstract

Innovation and intellectual capital are essential factors that companies must pay attention to in maintaining their performance and business sustainability. Innovation decisions and investments intellectual capital require support from the owners to improve the company's performance. This study aims to analyze the innovation decisions studied through two strategies: demand-pull and technology push, and the role of intellectual capital in improving company performance, and moderated by family ownership. In this study, the demand-pull and technology push strategy is measured by looking at new product launches and purchases of new equipment by companies for a certain period.  Intellectual capital is calculated by using the Value-Added Intellectual Coefficient (VAIC), then Return on Asset (ROA) to measure the company's performance. The subjects of this study were twenty-six (26) companies with family ownership engaged in consumer goods sectors and listed on the Indonesia Stock Exchange (IDX) in the 2015-2019 period. The data used were 130 including 30 data from the study were outliers. This study uses multiple linear regression moderation. The test results show that the innovation factors, namely demand-pull and technology push, and intellectual capital, positively influence company performance. However, family ownership weakens the influence of both innovation factors and can’t moderate the effect of intellectual capital on performance.

Dimensions

Downloads

Download data is not yet available.

Plum Analytics

Article Details

Section
Articles
Author Biographies

Maria Natasya Duka, Atma Jaya Catholic University

Management Study Program

Christiana Fara Dharmastuti, Atma Jaya Catholic University

Management Study Program

References

Akio, T. (2005). The Critical Assessment of the resource-based view of strategic management: The source of heterogeneity of the firm. Ritsumeikan International Affairs Journal, 3, 125–150.

Akova, B., Ulusoy, G., Payzın, E., Kaylan, A.R., 1998. New product development capabilities of the Turkish electronics industry. In: Proceedings of the Fifth International Product Development Management Conference, Como, Italy, pp. 863–876

Ali, Ashiq., Chen, Tai-Yuan., Radhakrishnan, Suresh. 2007. Corporate disclosures by family firms. Journal of Accounting and Economics Vol.44 (2007) 238–286. doi:10.1016/j.jacceco.2007.01.006

Astuti, A. D., Rahman, A., Sudarno. (2015). Pengaruh Kepemilikan Keluarga Terhadap Kinerja Perusahaan Dengan Agency Cost Sebagai Variabel Moderating. Jurnal Dinamika Akuntansi. Vol.7, No.2, pp.98-108.

Bejinaru, R. (2017). Knowledge strategies aiming to improve the intellectual capital of universities. Management & Marketing, 12(3), 500-523. https://doi.org/10.1515/mmcks-2017-0030

Beuren, I., Politelo, L., & Martin, J. 2016. "Influence of Family Ownership on Company Performance." International of Managerial Finance, Vol. 12 No.5 Pp. 664-672.

Block, J. H. (2012). R&D investments in family and founder firms: An agency perspective. Journal of Business Venturing, 27(2), 248–265.

Blundell, R., Griffiths, R., & Van Reenen, J. (1999). Market share, market value, and innovation in a panel of British manufacturing firms. Review of Economic Studies, 66 (3), 529-554. https://doi.org/10.1111/1467-937x.00097

Bontis, N., Chua Chong Keow, W., & Richardson, S. (2000). Intellectual capital and business performance in Malaysian industries. Journal of Intellectual Capital, 1 (1), 85-100. https://doi.org/10.1108/14691930010324188

Chang, S., & Shim, J. (2014). When does transitioning from family to professional management improve firm performance? Strategic Management Journal, 36(9), 1297-1316. https://doi.org/10.1002/smj.2289

Claver-Cortés, E., Zaragoza-Sáez, P. C., Molina-Manchón, H., & Úbeda-García, M. (2015). Intellectual capital in family firms: Human capital identification and measurement. Journal of Intellectual Capital, 16(1), 199-223. https://doi.org/10.1108/jic-04-2014-0046

Credit Suisse. (2018, September). The CS Family 1000 in 2018. www.credit-suisse.com.

De Massis, A., Frattini, F., Pizzurno, E., & Cassia, L. (2013). Product Innovation in Family versus Nonfamily Firms: An Exploratory Analysis. Journal of Small Business Management, 53(1), 1–36. doi:10.1111/jsbm.12068

Frank, H., Kessler, A., Bachner, C., Fuetsch, E., & Suess-Reyes, J. (2019). Principles for innovation management in family firms. Journal of Family Business Management, 9(3), 319-348. https://doi.org/10.1108/jfbm-09-2018-0049

Harsasi, M. (2014). Inovasi dan Strategi Produk. ISBN 9789790116504

Ho, S. and K. Wong. 2001. A Study of the Relationship Between Corporate Governance. Structure and the Extent of Voluntary Disclosure. Journal of International Accounting, Auditing & Taxation 10, 139–156.

Hsu, Y.H. and Fang, W. (2009) Intellectual Capital and New Product Development Performance: The Mediating Role of Organizational Learning Capability. Technological Forecasting and Social Change, 76, 664-677. https://doi.org/10.1016/j.techfore.2008.03.012

Irawan. (2016). MANAJEMEN PERUBAHAN PADA PERUSAHAAN KELUARGA: STUDI KASUS PT RODA BAHAR. Repository Universitas Pakuan. https://repository.unpak.ac.id/tukangna/repo/file/files-20180723053556.pdf

Karchegani, M. R., Sofian, S., & Amin, S. M. (2013). The Relationship Between Intellectual Capital and Innovation. International Journal of Business and Management Studies.

Laursen, K., & Salter, A. (2005). Open for innovation: The role of openness in explaining innovation performance among U.K. manufacturing firms. Strategic Management Journal, 27(2), 131-150. https://doi.org/10.1002/smj.507

Layyinaturrobaniyah, L., Sudarsono, R., & Fitriyana, D. (2014). Agency cost pada perusahaan keluarga dan non keluarga. Jurnal Siasat Bisnis, 18(2), 169-179. https://doi.org/10.20885/jsb.vol18.iss2.art3

Manzaneque, M., Ramírez, Y., & Diéguez-Soto, J. (2017). Intellectual capital efficiency, technological innovation and family management. Innovation, 19(2), 167–188. doi:10.1080/14479338.2016.1272828

Marr, B., Gray, D., & Neely, A. (2003). Why do firms measure their intellectual capital? Journal of Intellectual Capital, 4(4), 441-464. https://doi.org/10.1108/14691930310504509

McDowell, William C. & Peake, Whitney O., Coder, LeAnne & Harris, M. L. (2018). "Building small firm performance through intellectual capital development: Exploring innovation as the "black box", Journal of Business Research, Elsevier, vol. 88(C), pages 321-327.

Nieto, M.J., Santamaria, L. and Fernandez, Z. (2015), "Understanding the innovation behavior of family firms", Journal of Small Business Management, Vol. 53 No. 2, pp. 382-399.

Nieves, Q., & Osorio. (2014). Knowledge-Based Resources and Innovation in The Hotel Industry. International Journal of Hospitality Management. Vol. 38, 65–73.

Peteraf, M. A., & Barney, J. B. (2003). Unraveling the resource-based tangle. Managerial and Decision Economics, 24(4), 309-323. https://doi.org/10.1002/mde.1126

Poza, E. J. & Daugherty, M.S. (2013). Family business. Cengage Learning. ISBN-13: 978-0-324-59769-1

Price Waterhouse Cooper. (2014, November). Survey Bisnis Keluarga 2014 Indonesia. PwC: Audit and assurance, consulting, and tax services. https://www.pwc.com/id/en/publications/assets/indonesia-report-family-business-survey-2014.pdf

Pulic, A. (2000). "VAICTM – an accounting tool for IC management", International Journal of Technology Management. Vol.20 Issue 5-8.

Saxena, G. (2015). Imagined relational capital: an analytical tool in considering small tourism Firm's sociality. Tourism Management, 40, 109-118.

Schroeder, R. G., Van de Ven, A. H., Scudder, G. D. and Polley, D. (Eds.) (2000) The Development of Innovation Ideas. Oxford University Press, Oxford; New York

Shi, C. (2003). On the trade-off between the future benefits and riskiness of R&D: A bondholders' perspective. Journal of Accounting and Economics, 35(2), 227–254.

Sirmon, D.G. and Hitt, M.A. (2003), "Managing resources: linking unique resources, management and wealth creation in family firms", Entrepreneurship: Theory and Practice, Vol. 27 No. 4, pp. 339-358. https://doi.org/10.1111%2F1540-8520.t01-1-00013

Shyu, J. (2011). Family ownership and firm performance: Evidence from Taiwanese firms. International Journal of Managerial Finance, 7(4), 397-411. https://doi.org/10.1108/17439131111166393

Sofka, W., & Grimpe, C. (2010). Specialized search and innovation performance – Evidence across Europe. R&D Management 40 (3). http://dx.doi.org/10.1111/j.1467-9310.2010.00592.x

Soleh, M. (2008). Analisis Strategi Inovasi Dan Dampaknya Terhadap Kinerja Perusahaan (Studi Kasus: Ukm Manufaktur Di Kota Semarang) (Tesis). Semarang: Universitas Diponegoro. http://eprints.undip.ac.id/18217/

Tabalujan, B. S. (2002). Family capitalism and corporate governance of family-controlled listed companies in Indonesia. UNSW Law Journal. https://www.unswlawjournal.unsw.edu.au/article/family-capitalism-and-corporate-governance-of-family-controlled-listed-companies-in-indonesia/

Tjondrorahardja, Daud. (2005). The Greatest FBI (Family Business Inspiration) On Earth. Indonesia: PT.Elex Media Komputindo

Tsao, S., & Lien, W. (2011). Family management and internationalization: The impact on firm performance and innovation. Management International Review, 53(2), 189-213. https://doi.org/10.1007/s11575-011-0125-9

Urbancova, H. (2013). Competitive Advantage Achievement Through Innovation And Knowledge. Journal of Competitiveness. Vol. 5, Issue 1, 82–96. http://dx.doi.org/10.7441/joc.2013.01.06

Villalonga, B., & Amit, R. (2006). How do family ownership, control, and management affect firm value? Journal of Financial Economics, 80 (2), 385-417. https://doi.org/10.1016/j.jfineco.2004.12.005

Wiranata, Y. A., Nugrahanti, Y. W. (2013). Pengaruh Struktur Kepemilikan Terhadap Profitabilitas Perusahaan Manufaktur di Indonesia. Jurnal Akuntansi dan Keuangan, Vol. 15, No. 1. DOI: https://doi.org/10.9744/jak.15.1.15-26