Abstract

The difference between market value and book value of a company is attributed to Intellectual Capital (IC). This difference is as an Indicator to recognize the efficiency or inefficiency of a company. Therefore, the effective use of IC is one of the most important factors on company efficiency. IC is a group of knowledge assets and one of these knowledge assets is Corporate Social Capital (CSC). CSC is a kind of intangible assets and it is argued that the main dimensions of CSC are relevant to IC. In this paper, CSC is defined as the characteristics of the IC, Corporate Reputation (CR), and Structural Social Capital (SSC). The problems that this study has focused on are (i) absence of known and clear mechanism for assessing the impact of CSC on company efficiency, (ii) applying an indicator to assess the efficiency instead applying a set of indicators, and (iii) disregard of financial soundness as an effective element on company efficiency. Base on the problem of the study, the objectives of this study are (i) to examine the relationship between CSC and company efficiency, (ii) to determine the effects of each one of CSC’s components on company efficiency, and (iii) to examine the interaction effects of variable or variables that have unexpected results on company efficiency. The data were analyzed used by (i) Multiple Regression, (ii) Post Hoc Analysis (PHA), and (iii) Principal Component Analysis (PCA). The results showed that (i) CSC has an important influence on company efficiency, (ii) Centrality, Human Capital and Financial Soundness have positive influence on company efficiency, and (iii) Research Intensity and Internal Capital have negative influence on company efficiency. Lastly, Financial Soundness can counteract the negative influences of Research Intensity and Internal Capital on company efficiency. The results of the study suggested that (i) added value of CSC to different companies in the ICT sector showed be recognized (ii) showed a theoretical model for CSC, and (iii) External Capital is substituted by company Centrality in IC. The findings of the study also show the importance of IC and CSC on company efficiency and it is recommended that CSC should be considered as an important element on company efficiency that has influence on financial statements.

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