INSTITUTIONAL OWNERSHIP AND INTELLECTUAL CAPITAL INFLUENCE VALUE OF TEXTILE AND GARMENT COMPANY

Abstract

This study examine about institutional ownership and intellectual capital impact the value of textile and garment companies listed on the IDX from 2018 to 2022. Despite the business world seeing companies struggle to maintain their value, the textile and garment sector has seen declining values. Institutional ownership is gauged using a ratio of institutional shares to total outstanding shares, while intellectual capital is evaluated using the VAIC^TM method on a ratio scale. Company value is assessed using Tobin's q. The sample comprises 14 companies, totaling 70 data points obtained through purposive sampling. Data analysis involves testing classical assumption, multiple linear regression, correlation, determination, partial tests, and simultaneous tests using IBM SPSS version 26 software. The results reveal that institutional ownership negatively impacts company value, as weak or inactive ownership can lead to conflicts of interest between shareholders and management. This can result in agents prioritizing personal gains over shareholder interests, particularly when institutions adopt a passive ownership approach without active management involvement. Conversely, intellectual capital positively influences company value by driving innovation, leading to improved products, processes, and solutions that enhance competitiveness and market share.