Intellectual Capital and Working Capital Management: The Mediating Role of R&D Capitalization in Indonesian Family Firms Sendy Dwi Haryanto & Dian Agustia
1 Accounting Departement, Faculty Economics and Business, Universitas Airlangga, Indonesia
2 Vocational Tax Management, Faculty Economics and Business, Universitas PGRI Madiun, Indonesia
Abstract
Abstract
Purpose - In this study, we investigate the intricate relationships between intellectual capital (IC), R&D capitalization (R&D), and working capital management (WCM) within Indonesian family firms. Drawing upon resource-based theory (RBT), we examine how knowledge resources influence operational efficiency through direct application and formalized innovation pathways.
Methods - We analyze 448 firm-year observations from Indonesian family firms (2017-2023), employing system GMM estimation to address endogeneity concerns. Our research utilizes the Hayes PROCESS analysis examines R&D capitalization^s mediating role.
Findings - Our results demonstrate that intellectual capital significantly enhances working capital management through reduced inventory and receivables cycles and extended payables periods. The M-VAIC model demonstrates superior explanatory power compared to traditional VAIC, highlighting the importance of innovation and relational capital dimensions in operational efficiency. R&D capitalization both directly improves working capital efficiency and mediates of intellectual capital^s operational impact. Our component-level analysis reveals heterogeneous patterns, with innovation capital exhibiting stronger complementarity with R&D capitalization than relational capital.
Suggestion- Our findings suggest Indonesian family firms should prioritize balanced intellectual capital development across all dimensions, with particular emphasis on innovation capital formalization through strategic R&D capitalization. Family businesses with concentrated ownership should establish governance mechanisms that mitigate potential entrenchment effects impeding intellectual capital deployment in operational management.
Keywords: Intellectual capital, working capital management, R&D capitalization, M-VAIC, family firms Indonesia
