Intellectual Capital, Corporate Social Responsibility and Financial Performance: Evidence from Indonesian Banks

Abstract

This study aims to examine the effect of intellectual capital and corporate social responsibility on the financial performance of banking companies listed on the Indonesia Stock Exchange during the period 2021–2024. This study employs a quantitative approach using secondary data from annual reports and sustainability reports of 18 listed banks, resulting in 72 firm-year observations. Financial performance is measured by Return on Assets (ROA), intellectual capital is proxied by the Value Added Intellectual Coefficient (VAIC™), and corporate social responsibility is measured using the CSR Disclosure Index based on GRI Standards. Data are analyzed using multiple linear regression after classical assumption tests. The results indicate that intellectual capital has a statistically significant negative effect on financial performance, while corporate social responsibility does not have a significant effect on ROA. Simultaneously, intellectual capital and CSR do not significantly explain variations in bank profitability during the observation period. This study extends the Resource-Based View and Legitimacy Theory by showing that the financial impact of intellectual capital and CSR is context-dependent and not always reflected in short-term accounting performance. The study is limited to accounting-based performance measures and a short observation period. The findings suggest that banks should manage intellectual capital and CSR from a long-term strategic perspective.