Abstract
This study seeks to understand the role of intellectual capital and capital structure in maintaining the financial performance and cultural sustainability of village credit unions in Bali, locally known as lembaga perkreditan desa (LPD), which is crucial in the funding of cultural and religious activities of traditional villages. Intellectual capital is measured using value-added intellectual capital coefficient (VAIC) and partially analysed by human capital, structural capital, and capital employed efficiency. This study uses panel data samples of 307 LPD representing all nine regencies in Bali from 2020 to 2022. The analysis was performed using multiple linear regression, with findings that intellectual capital has a positive impact on financial performance and cultural sustainability, while capital structure shows insignificant impact. Furthermore, the control variables suggest that age and financial health have a positive impact on financial performance, whereas size has an insignificant impact. The results suggest that the LPD would need to improve its intellectual capital efficiency to achieve the desired financial performance and maintaining the cultural sustainability of the traditional village. It implicates that intellectual capital within its intangible nature has more impact than inherent practices of capital composition associated with microfinance.
Author contributions statement
The first author is involved in conception and design of the research, analysis and interpretation of the data, and drafting the paper. All authors are involved in the revising it critically for intellectual content, and the final approval of the published version. All authors are accountable for all aspects of the work.
Disclosure statement
No potential conflict of interest was reported by the authors.
Data availability statement
The data used in this research were provided by Lembaga Pemberdayaan Lembaga Perkreditan Desa (LP-LPD) and were processed according to the authors. The data are available upon request from the authors by contacting the corresponding author at [email protected].
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Notes on contributors
I Wayan Pradnyantha Wirasedana
I Wayan Pradnyantha Wirasedana is an accounting lecturer at Universitas Udayana, Indonesia and member of CPA Australia. The author is currently undertaking doctorate degree in accounting at Universitas Brawijaya, Indonesia, with thesis subject on microfinance. The author research interest including financial accounting, behavioural accounting and microfinance.
Made Sudarma
Made Sudarma is a professor of accounting at Universitas Brawijaya, Indonesia with research interest including auditing and behavioural accounting. The author has publications in reputable international journal as well as academic textbook.
Wuryan Andayani
Wuryan Andayani is a professor of accounting at Universitas Brawijaya, Indonesia with research interest including sustainability, corporate social responsibility, public sector accounting, and behavioural accounting. The author has publications in reputable international journal as well as academic textbook.
Aji Dedi Mulawarman
Aji Dedi Mulawarman is an associate professor of accounting at Universitas Brawijaya, Indonesia with research interest incorporating post-modern and Nusantara approach. The author has publications in reputable international journal as well as books in philosophy and ideology.