THE EFFECT OF INTELLECTUAL CAPITAL TOWARDS FIRM FINANCIAL PERFORMANCE: STUDY IN HIGH-TECH FIRMS IN INDONESIA AND MALAYSIA

Intellectual Capital (IC) is important because firms in ASEAN needs a lot of competitive advantage, mainly from IC, in order to compete in the era of ASEAN Economics Community (AEC). This study investigates the role of intellectual capital in affecting the firm financial performance. The data collected from annual report from high-tech industries and conducted on two ASEAN countries, namely Indonesia and Malaysia. The final sample used in this study consists of a total of 619 observations. This study uses panel data regression model analysis, i.e. fixed effect regression and random effect regression. The results showed that intellectual capital has a positive effect on financial performance in Indonesia and Malaysia. This result indicate that intellectual capital can give higher financial performance for the firms.