A multidimensional intellectual capital and financing decision: the mediating role of firm performance

This research examines the impact of Multidimensional Intellectual Capital on financing decisions and their relationship with firm performance. Modified IC variables (M-VAIC) include: Capital Employee Efficiency (CEE), Human Capital Efficiency (HCE), Structural Capital Efficiency (SCE), Relational Capital Efficiency (RCE), Innovation Capital Efficiency (InoCE), tested the consistency of influence on firm performance using: Return on Assets (ROA); Return on Investment (ROI) and Return on Equity (ROE), as well as Debt to Equity (DER) and Debt to Assets Ratio (DAR). The research design was an explanatory study based on robustness testing of the model using the Generalized Method of Moments (GMM). It used panel data for 42 banking industries in Indonesia, with N samples of 378 from 2015 to 2023. Novelty, methodologically, produced a robust model regarding the nexus between multi-dimensional IC and financial decisions through firm performance ROA, ROI, and ROE. The research findings, SCE, and InoCE, were fully mediated by firm performance (ROI and ROE). This supported the pecking order theory, and RCE influenced financial decisions in line with the optimum capital structure theory. This research model robustly contributes to strengthening the concept of multidimensional intellectual capital, pecking order, and optimal capital structure theory. It is recommended for future research to be developed by comparing the banking and manufacturing industries and the development of multidimensional intellectual capita