Intellectual Capital Exploitation in Investment Opportunity Set Through Risk Premium: Strategy to Increase Company Value

DOI

10.2991/aebmr.k.200410.044How to use a DOI?

Keywords

knowledge-based theory, risk management and knowledge-based risk management theory, risk premium

Abstract

This study aims to describe the strategic relationship between intellectual capital and investment decisions of companies. This study attempts to include intellectual capital, supported by risk management in increasing company value. The approach of this study is conducted through describing risk management based on utility theory and risk premium measurement, including estimation of the manager’s attitude towards risk. This paper integrates literature review to identify the strategic relationship between intellectual capital and investment decisions. Several basic theories are also employed to establish the relationships, which engage knowledge-based theory, risk management, and knowledge-based risk management theory. Based on those theories and previous studies, this study investigated that intellectual capital served as an intangible capital based on knowledge shifting companies’ performance leading to changing company value. However, intellectual capital has been unable to determine company value. Investment policy should be undertaken for shifting company value emphasizing an investment opportunity set as an important mediation between intellectual capital and company value. Meanwhile, based on risk management theory, to undertake investment, a company should consider the risk premium in investment decision making due to moderating effect of risk premium on company’s performance, which in turn affects the company value. Therefore, this study determines the risk premium as a moderating variable driving investment opportunity set.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Sumiati
AU  - Risna Wijayanti
AU  - Hanif Rani Iswari
PY  - 2020
DA  - 2020/04/13
TI  - Intellectual Capital Exploitation in Investment Opportunity Set Through Risk Premium: Strategy to Increase Company Value
BT  - Proceedings of the 3rd Asia Pacific International Conference of Management and Business Science (AICMBS 2019)
PB  - Atlantis Press
SP  - 284
EP  - 294
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.200410.044
DO  - 10.2991/aebmr.k.200410.044
ID  - 2020
ER  -