Analysis of The Intellectual Capital, ESG Score, and Firm Performance: The Moderating Effect of Auditor Characteristics
Abstract
This study examined the impact of intellectual capital (IC) through its three proxies (human capital, structural capital, and relational capital) and environmental, social, and governance (ESG) scores on firm performance in companies listed on the Indonesia Stock Exchange (IDX). Additionally, the research investigated the role of auditor characteristics (Big-N and non-Big-N auditors) in moderating the influence of intellectual capital and environmental, social, and governance on firm performance. A total of 146 data points were obtained from 73 business entity in the industry listed on the IDX from 2021 to 2022. Fixed effects regression analysis was employed to mitigate endogeneity issues. The sample was divided based on clients audited by Big-4 and non-Big-4 firms to test the moderating effect of auditor characteristics empirically. This study shows that intellectual capital (IC) proxied by human capital, structural capital and capital employe efficiency is not proven to significantly improve company performance. The environmental, social, and governance (ESG) score was found to have no significant effect on firm performance, and auditor characteristics did not mediate the relationship between IC, ESG scores, and firm performance.
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