Intellectual Capital Disclosure Index Research Articles

Do Enterprise Risk Management Disclosure and Intellectual Capital Disclosure Contribute to Firm Value?

This study aims to determine the effect on the value of mining companies listed on the Indonesia Stock Exchange (IDX) from the aspect of disclosure of enterprise risk management and disclosure of intellectual capital. The variables that are the focus of this study are the disclosure of enterprise risk management (X1) and intellectual capital disclosure (X2), which are measured using the enterprise risk management disclosure index and intellectual capital disclosure index. Meanwhile, firm value (Y), which is measured using Tobin's Q, acts as the dependent variable in this analysis. The sample of this study was selected through purposive sampling technique, so that there were 32 mining companies that became the sample of the study. The data used in this study were obtained through data collection techniques in the form of documentation. Then, this data is analyzed using data analysis techniques which include classical assumption tests, multiple linear regression tests, and hypothesis testing. The results showed that individually, the disclosure of enterprise risk management practices has a negative impact on firm value, while the disclosure of intellectual capital has a positive impact on the value of mining companies listed on the Indonesia Stock Exchange in 2022. Together, the disclosure of enterprise risk management practices and the disclosure of intellectual capital have a positive impact on the value of the same company in the same year.

The evolution of intellectual capital disclosure driven by European regulatory change: evidence from the Italian stock market

PurposeThe matter of interest is the reporting and disclosure of intellectual capital (IC) in the global “knowledge economy” era. The aim of the paper is twofold: to verify the level of disclosure of IC through the non-financial statements (NFSs) published by public companies and to identify the main firm-specific factors that explain the propensity to disclose.Design/methodology/approachBased on the 27 components of IC, a scoring system is designed to measure the level of disclosure of IC by 47 listed Italian companies. Content analysis (CA) is performed on the NFSs these companies published in 2020, to measure each company's so-called intellectual capital disclosure index (ICDI). A regression analysis is then applied to relate the ICDI scores to some firm-specific variables to determine their relevance and influence on the level of disclosure.FindingsAlthough the NFS was not designed specifically for IC, the results of the analyses show an overall barely satisfactory ability of the NFS to give certain information on IC. Furthermore, the propensity to disclose IC appears significantly related to some firm characteristics considered here, such as capitalization, profitability, productivity, intangibility and financial structure.Research limitations/implicationsThe analysis relates to a representative but limited sample that does not allow for sectoral or time-series analyses. Extending the companies and years under observation would allow the results to be validated with broader and more in-depth analysis.Originality/valueThis paper provides exploratory but interesting evidence about the relationships between IC disclosure (ICD), firm characteristics and market capitalization. Despite several previous studies on the disclosure of IC, no analyses were found that focused on the information capacity of the NFS. Also, to the authors' knowledge, relatively few researchers have considered a set of financial ratios that include capital structure indices.

Intellectual capital disclosure and financial performance nexus in Islamic and conventional banks in the GCC countries

PurposeThis paper aims to comparatively examine the impact of the intellectual capital performance on the financial performance of Islamic and conventional banks in the Gulf Cooperation Council (GCC) countries by classifying intellectual capital as human capital, knowledge creation and innovation processes.Design/methodology/approachAlong with the theoretical discussion in essentialising the rationale for intellectual capital formation through Islamic norms, the empirical analysis is formulated through the data generated by disclosure analysis using a panel of five GCC countries examining 408 annual reports from 19 Islamic and 23 conventional banks covering 2010–2019 period. In the analysis of the generated data, both fixed and random effects regression models are used.FindingsThe findings of this paper suggest that Islamic banks perform better than conventional banks in creating intellectual capital through knowledge creation, human capital and intellectual contribution. While the intellectual capital disclosure index and its pillars are significant for Islamic banks, these variables are not significant for the conventional banks in the GCC countries.Research limitations/implicationsConsidering that disclosed information may not reflect actual experience and performance, factual data could also be used to overcome potential shortcomings of disclosure generated data.Practical implicationsThis paper demonstrates that Islamic banks in the GCC have been successful in their intellectual capital performance, whereby they seem to be performing in line with the Islamic ontology. In addition, the disclosure items used in this paper may guide the Islamic and conventional banks in the process of preparing their annual reports. Importantly, they may use these items as benchmarks in further developing their intellectual capital performance for better financial performance.Originality/valueThis paper essentialises knowledge development and innovation for Islamic banks through the Islamic cognitive system rather than as a requirement of the market mechanism. Secondly, a comparative analysis between Islamic and conventional banks is presented by acknowledging the peculiarities of Islamic banks in the methodology and disclosure index.

Board Characteristics and Intellectual Capital Disclosures: Evidence from Sri Lanka

Purpose: The purpose of this study is two-fold. First, to examine the state of intellectual capital disclosures. Second, to investigate the relationship between board characteristics and intellectual capital disclosures. Design: This study selected thirty non-financial listed companies with the highest market capitalization from the Colombo Stock Exchange in Sri Lanka. An intellectual capital disclosure index comprising 61 items was developed to understand the level of intellectual capital disclosure in the selected companies. Panel data analysis techniques were applied to test the proposed hypotheses. Findings: Results indicated that role duality and proportion of female directors have a significant and positive impact on intellectual capital disclosures. Firm leverage was found to have a significant and negative effect on intellectual capital disclosures. Insufficient empirical evidence between other corporate board characteristics and intellectual capital disclosure in Sri Lanka may be attributed to a non-mandatory corporate disclosure environment. Originality: This is among the few studies to examine the link between corporate governance and intellectual capital disclosures employing panel data in Sri Lanka. However, a discourse on the role of corporate governance and corporate disclosures is warranted in a small island developing economy with a fragile financial system like Sri Lanka. Future Research Directions – The study calls for more studies to investigate the relationship between corporate governance and intellectual capital disclosures in the case of Sri Lanka by employing data from different industries for longer periods.

Managerial ability and intellectual capital disclosure

PurposeWhile prior research in the area of intellectual capital (IC) disclosure has mainly focused on firm, board and audit committee characteristics, there is little research on whether managerial characteristics are associated with IC disclosure. This study aims to examine the relationship between managerial ability (MA) and the extent of IC disclosure.Design/methodology/approachThe study sample comprises 1,098 firm-year observations of Iranian listed firms during 2012–2017. This study uses the checklist developed by Li et al. (2008) and adopts a content analysis approach and calculates the IC disclosure index in 62 dimensions within three categories: human capital, structural capital and relational capital. To measure MA, this study uses the managerial ability score (MA-Score) developed by Demerjian et al. (2012) for Iranian firms.FindingsThe results show that MA is significantly and negatively associated with the overall extent of IC disclosure and all the three components of IC (human capital, structural capital and relational capital). Further analysis shows that the interaction between MA and firm performance is positive and significant, suggesting that the negative relationship between MA and IC disclosure is less pronounced for high-performing firms. This study addresses the potential endogeneity issue by using the propensity score matching approach. The findings are also robust to the alternative measure of MA.Originality/valueThis study contributes to both the MA literature and the IC disclosure literature. To the best of the authors' knowledge, this study is the first to provide empirical evidence on the relationship between MA and IC disclosure.

PERAN INFORMASI MODAL INTELEKTUAL SEBAGAI VARIABEL MODERASI PADA HUBUNGAN ANTARA MODAL INTELEKTUAL DAN NILAI PERUSAHAAN

This paper empirically examines whether type of intellectual capital (IC) information affect market value of the firm. This paper also examines whether voluntary disclosure of intellectual capital information will strengthen the affect of intellectual capital information to market value of the firm. The samples were the banking industry firm listed on the Indonesia Stock Exchange from 2017-2019. The variable of type of IC information measured by Intellectual Capital Disclosure Index (ICDI) by modifying the approach of García-Meca and Martínez (2007). The study finds that IC positively effect on market value of the firms. Moreover, this study finds that IC information-especially voluntary disclosure also strengthen (as moderating variable) the IC effect on firm value.

Propensity for and Quality of Intellectual Capital Divulgence Across the BRICS Banking Sector: A Knowledge-Based Perspective from Emerging Economies

The study seeks to identify patterns of the propensity for (frequency) and quality of (mean score) intellectual capital (IC) divulgence components (internal capital, external capital and human capital) of banks from Brazil, Russia, India, China and South Africa (“BRICS”). The research typology constructs a 5-year (2015–2019) IC disclosure index utilizing the content analysis of the annual reports and Web sites of the ten largest BRICS banks. The study selected banks according to their asset portfolios. It applies content analysis for the codification of qualitative information into quantitative patterns and principles. The findings reveal that the IC disclosure practices of BRICS banks fall into modest to satisfactory positions in all three selected categories of IC classifications. Also, the propensity for and quality of IC disclosure alters due to the non-occurrence of IC frameworks and reporting mechanisms in BRICS banks. Disparity emerges between voluntary IC disclosure and the nominal role of institutional forces in banks. Although BRICS banks had better commitments to revealing valuable information about intangibles, IC managers developed the appropriate mechanisms to capture and report the hidden values of intangibles while demonstrating “licensing agreements,” “entrepreneurial abilities,” “financial relations,” and “job-associated knowledge.” Cross-sectional data in prior studies on IC disclosure are country- and firm-specific. Thus, this is among rare studies on longitudinal analysis that investigates the propensity for and quality of IC disclosure practices in the banking sector. It also incorporates a quality index of IC disclosure requiring underpinnings of institutional and resource-based views. In conclusion, institutional and resource-based factors influence the IC disclosure practices of BRICS banks. This is significant for the users of annual reports and Web sites who want to pursue IC-related information.

Intellectual capital disclosure practices of financial institutions in an emerging economy

Purpose The purpose of this study is to investigate the intellectual capital disclosure (ICD) practices of financial institutions in an emerging economy of Bangladesh. Design/methodology/approach Based on 93 items of intellectual capital categorized into internal capital, external capital and human capital, ICD index is developed for 53 financial institutions listed in Dhaka Stock Exchange. This study uses descriptive statistics to analyze ICD practices, and parametric and non-parametric tests to analyze the variation of ICD practices in terms of different categories as well as in terms of different sectors. Findings Results indicate that more than 70% of ICD items are generally not disclosed by financial institutions in Bangladesh. The highest of 36% of external capital disclosure items are disclosed, whereas the lowest of 18% of human resource capital elements are disclosed. Furthermore, results find the significant variability of ICD practices in terms of different intellectual capital categories and in between banking companies and non-banking financial institutions. Practical implications Findings have critical implications for managers, policymakers and regulators for setting appropriate strategies and regulations for improving the level of ICD, which, in turn, may reduce the information asymmetry problems of financial institutions as well. Originality/value In-depth analysis about variability of ICD practices creates value in the ICD literature by highlighting strategic priority of financial institutions to disclose information about the strategic resources in unique emerging economic settings such as Bangladesh.

The Impact of Intellectual Capital Disclosure on Firm Performance: Empirical Evidence from Pharmaceutical and Chemical Industry of Bangladesh

The main purpose of this study is to examine the impact of intellectual capital disclosure (ICD) on firm performance in the pharmaceutical and chemical industry of Bangladesh. In this study, 21 listed pharmaceutical and chemical companies have been selected as sample for 2016 and 2017. This study used the intellectual capital disclosure index developed by Rahman, Sobhan, and Islam. Return on assets and return on equity have been used as the proxy variable of firm performance. In this study, content analysis is performed to assess the level of disclosure regarding intellectual capital and pooled cross-sectional analysis is used to assess the relationship between ICD and firm performance. The study has found a positive and significant relationship between ICD and firm performance. Besides, an in-depth analysis of this study shows that all the components of ICD namely internal capital disclosure, external capital disclosure, and human capital disclosure are also positively and significantly associated with firm performance. The study suggests the development of an intellectual capital disclosure framework by the regulatory authority for mandatory compliance. This will improve the quality and quantity of ICD in the annual reports. Besides, firms should more emphasize on ICD which will help to improve their performance.

Determinants of intellectual capital disclosure of financial institutions in an emerging economy

This study aims to examine determinants of intellectual capital disclosures of financial institutions in an emerging economy. The study constructs an intellectual capital disclosure index (ICDI) based on the disclosure of intellectual capital information in the annual reports of 53 listed financial institutions in Bangladesh. The study applies both parametric and non-parametric tests to examine the relationship of different company characteristics with ICDI. Results suggest that profitability and riskiness of firms are important determinants of intellectual capital disclosures. These findings support regulators and policy makers for deepening their understanding about the intellectual capital disclosure strategy of financial institutions. This study also contributes to the theoretical understanding of intellectual capital reporting by highlighting limitations of agency theory in explaining the relationship between different company characteristics and intellectual capital disclosure in the context of financial institutions of Bangladesh.

ANALYSIS OF VALUE RELEVANCE OF INTELLECTUAL CAPITAL DISCLOSURE

This research aims to examine whether the disclosure of IC information conducted by the company in the annual report has value relevance. The research dependent variable is PRICE. The independent variables in this research are intellectual capital disclosure index (ICDI) obtained using Li, et. al. (2012) which consists of 61 items of IC information, net income (NI), and book value of equity (BVE). The research sample is a banking sector company listed on the Indonesia Stock Exchange (BEI) of the year 2012 through 2016 using annual report. The result of hypothesis testing with regression analysis using SPSS 23 application shows that ICDI coefficient is not have positive influence to stock price. But if it is divided into 3 components it can be seen that Human Capital Disclosure Index (HCDI) has a positive effect on stock price although Structural Capital Disclosure Index (SCDI) and Customer Capital Disclosure Index (CCDI) have no effect on stock price. This shows that not all information about intellectual capital has value relevance.

The Role of Firm Characteristics in Voluntary Disclosure of IC Information and Its Importance for High-Tech Companies

The purpose of this paper is to analyse whether the extent and quality of voluntarily disclosed information regarding intellectual capital (IC) are correlated with certain characteristics of a company. IC is very important for IT companies. Therefore, financial and non-financial statements of 32 high-tech companies were investigated using the content analysis method. To test the influence of firm characteristics on the intellectual capital disclosure index (ICDI), the regression model was used. The size of the firm was the only independent variable that has had a statistically significant influence on the ICDI. The auditor type, as well as financial ratios, have not shown a statistically significant influence on the extent and quality of IC disclosures. This study reflects the state regarding the voluntary IC disclosures in Croatia and therefore the study may be a roadmap for further research and, more importantly, might promote awareness of the importance of transparent reporting.

Factors Affecting the Intellectual Capital Disclosure Index: Evidence from Indonesian listed Companies

The financial statements have not been able to present the existence of intellectual capital in an enterprise. In accordance with the Signalling theory, the company's Board of Directors try to present a positive signal to stakeholders by presenting the existence of intellectual capital through the annual reports. In fact, the disclosure of the existence of the intellectual capital as measured by the Intellectual Capital Disclosure Index turns out different This includes insurance companies which in its operational often use intellectual capital. The research objectives are to find the determinant of the disclosure of intellectual capital on the insurance companies listed in the Indonesia Stock Exchange (IDX) using the method of the multiple linear regression testing. The test results showed simultaneously the size of corporations, the age company, return on equity, a measure of the frequency of meetings of Commissioners and how the Commissioners’ influence has a significant effect against the disclosure of intellectual capital. The implication is to open ways for academics to conduct the next research on intellectual capital in insurance companies and add new horizons of research on insurance in Indonesia which are still scarce.

Intellectual Capital Disclosure and Its Determinants: Empirical Evidence from Listed Pharmaceutical and Chemical Industry of Bangladesh

Purpose - The purpose of this study is to find out the intellectual capital disclosure (ICD) and its determinants in the pharmaceutical and chemical industry of Bangladesh. Research design, data, and methodology - This research study is conducted on the listed firms of pharmaceutical and chemical industry in Bangladesh during the period of 2016 to 2017. This study develops a self-structured intellectual capital disclosure index; and the proxies of determinants of ICD are used as board characteristics (board size, independent directors and female directors), ownership structures (institutional ownership and director ownership), and firm characteristics (firm size, leverage and performance). The study uses a content analysis to analyze the extent of ICD and a pooled cross-sectional method to find the determinants of ICD. Research Findings - This study finds that intellectual capital disclosure is positively associated with firm size, leverage, and firm performance and negatively associated with director ownership and institutional ownership. This study also finds that there is no significant association of ICD with independent director or female director. Conclusions - The study recommends that the regulatory authority should develop mandatory guidelines on ICD for ensuring proper and consistent disclosure about the intellectual capitals. Besides, the companies should include a separate section in the annual reports to disclose the measurement and management of intellectual capital.

Audit Committee Characteristics and their Impact on Intellectual Capital Disclosure: A Study of Listed Manufacturing Companies in Sri Lanka

In the today’s knowledge based economy, intellectual capital (IC) is considered as a strategic asset which determines the value of the company. Different practices of disclosing IC information in annual reports that do not show the real financial position of a company, is a main problem in Sri Lankan companies. The objective of this study was to find out the impact of audit committee characteristics on Intellectual Capital Disclosure (ICD) of listed companies on the Colombo Stock Exchange (CSE) for a period of five- years from 2012/2013 to 2017/2018. The ICD index comprised of 30 items in terms of Relational Capital Disclosure (RCD), Structural Capital Disclosure (SCD) and Human Capital Disclosure (HCD). The data was analyzed using correlations and regression analysis. Most of the Sri Lankan Listed companies disclosed ICD in text, sentences, pictures, tables and graphs in line with the Global Reporting Initiative (GRI) guidelines in their annual reports. ICD was measured by a disclosure index score. The independent variables comprised various forms of audit committee characteristics: audit committee size, frequency of audit committee meetings and audit committee independence. The study confirms that the size of the audit committee and audit committee meetings are important attributes to explain ICD in Sri Lanka. However, the study found a negative significant relationship between ICD and audit committee independence. Keywords: audit committee independence, audit committee meeting, audit committee size, intellectual capital disclosure

IC disclosure practices in India using a comprehensive disclosure framework

PurposeThis paper aims to address the need to modify the existing intellectual capital (IC) disclosure frameworks and examines the disclosure practices of Indian knowledge-based companies by using a comprehensive IC disclosure index that has been developed in this study.Design/methodology/approachThe annual reports of 30 listed knowledge-intensive companies from two sectors – pharmaceutical sector and engineering sector – have been analysed for a period of five years from 2010-2011 to 2014-2015. Additionally, the sample firms were ranked on the basis of market capitalisation (MC) to examine the IC reporting practice of firms with high and low MC. An IC disclosure index has been developed through comparative analysis of the frameworks used in three studies that is based on Bukh et al.’s (2001) classification. Further, the study has also considered intangibles and the related non-financial indicators of MERITUM guidelines. The disclosure index consists of a total of 69 items encompassing six components.FindingsThe overall IC disclosure trend showed an increase in reporting practice over the five-year study period. With respect to the components, process capital is found to be the most disclosed component while relational capital is the least disclosed component. After categorisation of firms into high and low MC, it has been observed that the IC disclosure scores of firms with high MC are significantly higher than firms with low MC.Practical implicationsThis paper has developed an IC disclosure index through careful analysis and scrutiny of the existing frameworks which contributes to the existing literature. Likewise, the use of a comprehensive framework can aid the investors to know the true value of the firm and make proper market decisions.Originality/valueThis is the first paper in the Indian context in which a modified IC disclosure index is framed based on Bukh et al. (2001) framework for examining IC reporting practices.

The Role of Universities in Consolidating Intellectual Capital and Generating New Knowledge for a Sustainable Bio-Economy

This study focuses on the wide debated concept of bio-economy, underlying its evolution and connection with universities’ goal, from the intellectual capital (IC) perspective. It’s aim is to highlight the mutual influence of IC disclosures and knowledge management in its ability to foster the development of the bio economic environment. Thus, this paper covers a significant gap by approaching the universities' IC disclosure and bio-economy evolution. It also enriches the literature by underpinning the proposed model on the macroeconomics theories (public interest theory, stakeholders or agency theory). These theories supports the need to enhance transparency and accountability through greater disclosure levels. The empirical research performed by combining the qualitative analysis performed for developing the IC disclosure index with the quantitative techniques enable us to develop an econometric model on the Romanian public universities. It is aimed to express their role in the IC as a mean of achieving a sustainable economy. The study’ results reveal that there is a strong connection between the IC disclosure and bio-economy, knowing that public universities are research clusters for innovative and durable economy environment. Moreover, based on the Romanian public universities' position, we identified and discussed about the explanatory factors influencing the IC disclosures, which can help or stimulate the association between the public and private interest, having bio-economy as a focus point.

Does Intellectual Capital Information (ICI) Make Difference to Investors’ Decisions? A Field Study on Egyptian Investors

This study aims to survey the literature and develop a more comprehensive intellectual capital disclosure index (ICDI). It also aims to identify whether intellectual capital information (ICI) have an influence on investors’ investment decisions in the Egyptian context and if so, identify the most important ICI elements to their investment decisions. In order to achieve the research objective a field study is conducted on a sample of Egyptian investors (brokers, banks, insurance companies, and other financial institutions). A self-administered questionnaire is used to collect the study data from the sample. A total of 500 questionnaires were distributed to a random sample of Egyptian stock market investors, only 182 questionnaires were collected. Thus, the percentage of initial responses is 36.4% of the total number of the distributed questionnaires. After excluding incomplete and invalid questionnaires, the current study ended up with 177 valid and useable questionnaires- representing 35.4% response rate. The results of the study show that the majority of the respondents agree on the importance of ICI to investors’ investment decisions. The finding also revealed that the ICI elements examined are not equal with regard to their influence on investment decisions. The findings of this study are not only important to improving investors’ assessments of investment opportunities but also could be useful to regulatory authorities in Egypt for the improvement of disclosure practices by Egyptian companies and enhancing transparency in the capital market. Also, the ranking of IC elements by importance will help eliminate non relevant items from the proposed ICD index and thus reducing the costs associated with disclosing these elements. Key Words: IC, ICDI, Factors influencing investment decisions, Field Study.

EFFECT OF INTELLECTUAL CAPITAL AND INTELLECTUAL CAPITAL DISCLOSURE ON FIRM VALUE

This research aims to review, analyze, and provide empirical evidence about the influence of intellectual capital, intellectual capital disclosure, and financial performance on listed companies in Indonesia Stock Exchange. The population of this research is 525 companies listed in Indonesian Stock Exchange 2011-2015. 365 companies were taken as a sample of this research using purposive sampling method. The research method used was multiple linear regression analysis. Intellectual capital was measured using VAICTM; intellectual capital disclosure was measured using intellectual capital disclosure index; corporate financial performance was measured using Return of Assets (ROA), and firm value was measured using Tobin’s Q. This study found that intellectual capital has no effect on firm value, while intellectual capital disclosure and corporate financial performance have positive influence on firm value. Future research is suggested to use cross-country companies as the sample.

UNDERWRITER REPUTATION, INTELLECTUAL CAPITAL DISCLOSURE, AND UNDERPRICING

This study examines the effect of underwriter reputation on the intellectual capital disclosure extent and the impact of intellectual capital disclosure on underpricing. We developed a measurement method of underwriter reputation by using three indicators, i.e. trading volume, trading value, and trading frequency. Moreover, we also developed an intellectual capital disclosure index which is apropriate with Indonesian regulation. The testing result of 221 firms which conducted initial public offering in 2000-2014 showed that the underwriter reputation is the determinant of intellectual capital disclosure. We also found that intellectual capital disclosure affected underpricing negatively. Those findings indicate that intellectual capital disclosure extent may reduce information asymmetry, so as to assist potential investors in assessing the quality and prospect of a firm in the future.Keywords: Underwriter Reputation; Intellectual Capital Disclosure; Underpricing.