Measuring the impact of intangible asset investment toward companies financial health and agency problem : empirical reasearch from Indonesian companies during world financial crisis period 2006-2011

Abstract

The thesis examines the impact of intangible investment toward company‟s health and company agency problem. The research chooses Intangible asset because of its special characteristic. Intangible asset as the asset of production has equipped the employee with better skills and knowledge on productions. On the other hand, an intangible asset that does not have physical evidence also triggered the liquidity problem of the company. The research chose Indonesia as the place of observation because of their growth in intangible asset investment. Based on OECD, after 2002, either Foreign Direct Investment or Intellectual Asset in Indonesia has increased. The thesis attempts to analyze how the impact of these assets toward company financial performance and agency conflict during the crisis. The research involves 158 companies, but because of the data availability reason the number of the company is refined into 30 Indonesian stock listed companies. The research collects data from 2006 until crisis 2011. Looking at market value, dividend policy, solvency ratio, intangible value, and company performance, as the empirical research parameter, the thesis reveals a significant relationship between the amount of intangible asset and the market value of the company. Secondly, the thesis also found the role of intangible asset in explaining the relationship between market value and agency conflict indicator.