Abstract
Based on the signaling theory, this study seeks to explain the interaction of corporate value and the disclosure of intellectual capital in a framework of analysis of recursive models. Testing the recursive model also involves firm size and company growth as a characteristic of the company to clarify the mediating role of intellectual capital in mediating both of the firm's values. We find a positive relationship between firm size and growth on intellectual capital disclosure. The greater the size and growth of the company, the more it encourages companies to disclose intellectual capital in the company's annual report. Also, we find a non-recursive model between intellectual capital disclosure and firm value. This shows that the broader the disclosure of IC information by the company, the better the investor's perception of the company is reflected in the value of the company. Meanwhile, at different times the current condition of the company's value will encourage companies to disclose more complete IC information.
Highlights
Stakeholder theory requires companies to carry out various strategies to maintain good relations with stakeholders. Freeman & Phillips (2002) explains that maintained good relations will bring success to the company
This finding is in line with research findings of Petty & Cuganesan (2005), Guthrie et al (2006), and Oliveira et al (2006) who concluded that the greater the size of the company shown by the total assets it has, will encourage companies to make more IC disclosures complete
In another part of this finding revealed that as a public company, increasing the size of the company motivates companies to be able to account for stakeholders in the form of more complete IC disclosure
Summary
Stakeholder theory requires companies to carry out various strategies to maintain good relations with stakeholders. Freeman & Phillips (2002) explains that maintained good relations will bring success to the company. Stakeholder theory requires companies to carry out various strategies to maintain good relations with stakeholders. Freeman & Phillips (2002) explains that maintained good relations will bring success to the company. Strategies to maintain good relations between the company and its stakeholders, among others, can be done through reporting various activities carried out by the company in one year, including disclosing the governance of intellectual capital owned by the company. This disclosure in other parts is a means for companies to give signals to stakeholders as a means of decision making. Signals given by companies in other parts are expected to be an effort for companies to reduce information asymmetry
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