Corporate Governance, Intellectual Capital and Firm Performance

Abstract

This paper investigates the impact of corporate governance and intellectual capital on firm
performance in Indonesian-listed firms. Using a balanced-panel of 120 Indonesian-listed
firms, this study employs a balanced panel method, using non linier IV 2SLS and non linier
IV-GMM. All variables, apart from commissioners, directors, education and capital
employed efficiency exhibit a non significant impact on Tobins’Q, while all variables are
statistically non significant for ROA. The findings are less conclusive than that of previous
studies in developed countries. This study provides recent evidence for the corporate
governance and intellectual capital in affecting firm peformance of listed-firms in Indonesian
Stock Exchange. Though most listed-firms in Indonesia is owned by group or family, the
appointment should be strictly complied to the regulations set, as current evidence indicates
that independent commissioners and directors have no impact on firm performance, hence an
awareness of good corporate governance conduct should be massively disseminated.