THE IMPACT OF CORPORATE GOVERNANCE ON INTELLECTUAL CAPITAL AND FIRM VALUE: EVIDENCE FROM INDONESIA AND MALAYSIA CONSUMER GOODS

The purpose of this research is to analyze the direct impact of corporate governance on firm value and its indirect impact using intellectual capital as the intervening variable and comparing the impact between Indonesia and Malaysia. Corporate governance is measured by managerial ownership, board size, and board composition. Intellectual capital is measured by value added intellectual coefficient. Firm value is measured by Tobin’s Q. This research is conducted upon consumer goods sector in Indonesia Stock Exchange and Bursa Malaysia during 2010-2015, with the total of 25 companies or 150 firm-year (Indonesia) and 106 companies or 636 firm-year (Malaysia). Multiple regression analysis is used to examine the model. The findings demonstrate mixed results. Managerial ownership has a significant impact on intellectual capital and firm value in both countries, it is positive in Indonesia, but negative in Malaysia. Board size and board composition do not have any significant influence towards the intellectual capital in Indonesia, but it is significant in Malaysia. The impact of both variables is also significant on firm value for Indonesia, but only board size is significant in Malaysia. Intellectual capital shows no significant correlation with firm value in Indonesia while it is significant in Malaysia