Quality Of Intellectual Capital Disclosure Research Articles

Voluntary Intellectual Capital Disclosure and Information Asymmetry: Study of Indian Firms

This article develops a disclosure index to examine the extent and quality of intellectual capital disclosure in Indian firms. Furthermore, it assesses the gap between stakeholder expectations and industry disclosure procedures by conducting five years database analysis. To analyze the extent and quality of intellectual capital disclosure, a content analysis technique was applied to a sample of 30 non-financial firms listed on the Bombay Stock Exchange for five years, 2018–2022. A disclosure index of 42 items was constructed based on previous studies under three intellectual capital categories: Structural Capital, Relational Capital, and Human Capital. It was found that Indian companies had a low level of intellectual capital disclosure, although it increased by 28% from 2018 to 2022. Also, there was an upward movement in the disclosure of all intellectual capital components. Structural capital is disclosed by the number of organizations, whereas human capital is being disclosed the lowest. This study developed a new disclosure index consisting of 42 intellectual capital items based on extant research conferred by experts. In addition, the study considered a Sensex non-financial company for the analysis. Third, this study uses graphs to represent disclosure quality.

The Extent of Intellectual Capital Disclosure and Corporate Governance Mechanism to Increase Market Value

The aim of this paper is to investigate the level of intellectual capital disclosure (ICD) in commercial banks listed on the Indonesian Stock Exchange. This paper also observed the effects of ICD and corporate governance mechanism on market value. This study uses content analysis techniques to measure ICD. The paper provides a novel approach to measure the ICD quality in developing countries using a four-numerical coding system. Secondary data were obtained from the financial statements and annual reports of the banks for the period 2011-2014. The data from 31 banks were analyzed using ordinary least square regression. The study reports that the quality of intellectual capital disclosure in Indonesian commercial banks increase steadily. Narrative disclosure dominates the report of intellectual capital in Indonesian banks. The results indicate that the size of audit committee, frequency of audit committee meeting, and intellectual capital disclosure affect positively the market value. Overall, the results indicate intellectual capital disclosure is associated with the market capitalization; these findings indicate that the ICD is a consideration in a stock investment decision. While regulations in Indonesia regarding intellectual capital reporting are not conclusive yet, the information needs of stakeholders have encouraged companies to expand voluntary disclosure.

Voluntary disclosure of intellectual capital information by deposit money banks in Nigeria

PurposeThe purpose of this paper is to investigate the extent and quality of voluntary intellectual capital disclosure (ICD) by deposit money banks (DMBs) in Nigeria.Design/methodology/approachData were collected from a survey of 271 informants and content analysis of the annual reports of 12 DMBs in Nigeria. The data collected were analysed using factor analysis,t-test, Friedman test for related sample and Wilcoxon signed-rank test.FindingsThe findings of this paper indicate that the extent of ICD is significant and higher than the quality of ICD, which is insignificant, with the extent of disclosure highest in the relational component of intellectual capital. It also shows that a significant difference exists amongst the extent of human capital, structural capital and relational capital disclosures, with the significant difference traced to the difference between the extent of disclosures of relational capital and human capital.Research limitations/implicationsThe results can be interpreted across the target sample where the study covers a five-year period and 12 DMBs in Nigeria. However, the study provides a robust empirical basis for policymakers and regulators to develop future ICD regulatory guidelines for banks and push for improvement in the quality of ICD by DMBs.Originality/valueNo previous studies of voluntary ICD have considered the extent and quality of ICD by DMBs in Nigeria. Further, this study shed the light on a new human capital item related to “employee health and mental state”; therefore, it extends and supports the previous empirical literature on ICD.

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.

Quality of Intellectual Capital Disclosures: The Role of Market Share and Financial Distress in Thai’s Agricultural and Resource Sectors

This study aims to examine the factors that influence the quality of intellectual capital disclosure (ICD). This study contributes to research related to ICD by using the value of the market share and financial distress as independent variables, in addition to the level of firm size. This study also tests the ICD in each of its components. Firm size is indicated by the amount of assets owned by the company; while market share is measured by the proportion of company sales in the total sales of one industry. Financial distress is indicated by the Altman-Z score, where the greater the Z-score, the safer the company from the risk of bankruptcy. ICD are more qualified if disclosures are supplemented by numerical and monetary data. The sample used is 50 agricultural and resource sectors companies registered in the Thai Stock Exchange from 2013-2017. This study finds that the quality of HCD is increasing along with the companys high assets. Market share can improve the quality of RCD, but on the other hand, reduce the quality of HCD. The safer the company from the bankruptcy risk, the higher the quality of the HCD. There are a variety of ICD measurements that can be used by subsequent research and are complemented by various other independent variables that can enrich empirical findings in ICD cases.

Factors Affecting Intellectual Capital Disclosures: A Case of Primary Sectors in Thailand

The aim of this paper is to explore the quality of Intellectual Capital Disclosure (ICD) in the modern economic era. Using the data from both agricultural sector and resources sector listed in The Stock Exchange of Thailand (SET) between 2013-2017 (15 companies each), the study finds that firm size has an influence on all aspects of ICD (Human Capital Disclosure, Internal Capital Disclosure, and External Capital Disclosure). Meanwhile, profitability affects Human Capital Disclosure and Internal Capital Disclosure. As a contribution to previous researches, the findings support the view in which information asymmetry has a positive relationship with External Capital Disclosure. Furthermore, it finds that market share has a significant influence on the quality of Human Capital Disclosure and Intellectual Capital Disclosure. Since the study applies content analysis which investigates companies annual reports according to ICD terms used in the reports, there is a possibility that the quality of ICD will not be wholly captured. In addition, firms may use other sources of information to communicate their ICD. To sum up, this paper assists in giving some insight about the quality of ICD in Thailand, especially agricultural sector and resource sector, as well as trying to inspect other factors related to ICD that was rarely used in previous research, such as market share.

Intellectual Capital Disclosure at Czech Public Universities in Relation to the Stakeholder Information Need

The purpose of this paper is to examine the extent and quality of intellectual capital disclosure at Czech public universities in relation to information need of identified stakeholders – students. This research is based on the theoretical framework for voluntary intellectual capital disclosure, the proposed intellectual capital disclosure index, the identification of stakeholders including their information need as well as the content analysis of the universities’ annual reports has been applied. The quality of disclosed information on intangible resources in public universities in the Czech Republic is in the middle level. In the highest quality is disclosed relational capital, followed by structural and human capital. Information need of students is highest for information falling under the relational capital followed by structural capital and human capital. This study opens new approach regarding intellectual capital disclosure including suggested recommendations for Czech public universities, as there was no research related to the issue conducted in the past.

Voluntary reporting of intellectual capital

Purpose – The purpose of this paper is to examine the quality of voluntary intellectual capital (IC) by universities in New Zealand, Australia, and the UK. Design/methodology/approach – An IC framework was developed to measure IC reporting in the university sector. Content analysis was used to analyse the 2011 annual reports before a three-year comparative analysis of 90 universities (eight New Zealand universities, 38 Australian universities, and 44 UK universities) was undertaken. Findings – New Zealand and Australian universities outperformed the UK universities in terms of IC disclosures. Additionally, the study found moderate increases in the levels of IC disclosures over the period of the study. The quality of IC disclosures by New Zealand universities was generally higher than their Australian and UK counterparts. Internal capital and human capital were the most disclosed categories with external capital being the least frequently disclosed in all three countries. However, the quality of external capital disclosures was higher than internal and human capital. Finally, most IC disclosures were narrative in nature. Practical implications – The framework developed in this study could be adapted, further enhanced, and then applied to exploring IC disclosures in higher educational institutes in other jurisdictions. Originality/value – This is the first comparative analysis of IC disclosures made by universities in three countries.

A longitudinal examination of intellectual capital disclosures and corporate governance attributes in Malaysia

PurposeThe purpose of this study is to examine the relationship between intellectual capital disclosure (ICD) and corporate governance attributes following the revised code on corporate governance in Malaysia in 2007.Design/methodology/approachThe sample of the present study was drawn from top companies listed on Bursa Malaysia based on their market capitalization for the years 2008, 2009 and 2010. A self‐constructed disclosure index was used to assess the extent and quality of ICDs. The panel data regression analysis was employed to examine the relationship between ICDs and corporate governance.FindingsThe results revealed that all corporate governance attributes namely board size, independent directors, board effectiveness and position of the chairman (except family members on the board) were significant in explaining the extent and quality of ICDs in the expected direction. Director ownership was found to be consistent in negatively relating to both the extent and quality of ICDs. Government ownership was marginally significant in determining the extent of ICDs.Practical implicationsThe findings suggest that the revised corporate governance code has a positive impact on ICD at least in the case of large Malaysian listed companies. This implies that regulatory efforts in enhancing corporate governance in Malaysia is starting to prove fruitful in encouraging companies to be involved in more IC investment and hence disclosure.Originality/valueThis paper is one of the few studies which investigate the influence of corporate governance on ICDs longitudinally in a developing country following revision to the corporate governance code in Malaysia in 2007.

Intellectual Capital Reporting in Iran

This paper assesses the extent and quality of intellectual capital disclosures in the annual reports of the IRAN. This paper makes use of an Intellectual Capital Disclosure index constructed through a participatory stakeholder consultation process to develop a disclosure index which measures the extent and quality intellectual capital reporting in the 2011/2012 annual reports of 105 IRAN. The final index comprised 26 items divided into three categories: internal capital, external capital and human capital. The most reported items were joint ventures/business collaborations and management processes, while the least reported items were intellectual property and licensing agreements. The most reported category of intellectual capital was internal capital, followed by external capital. Human capital was the least reported category.The paper identifies a number intellectual capital items whose reporting could be improved to meet stakeholder disclosure expectations. In the internal capital category this included the disclosure of intellectual property. In the external capital category disclosure concerning ratepayer demographics and licensing agreements could be improved. While the disclosure of most items in the human capital category could be improved, particular attention should be given to entrepreneurial innovativeness and vocational qualifications

Intellectual capital disclosure trends: some Malaysian evidence

PurposeThe purpose of this paper is to examine the trend of intellectual capital disclosures (ICD) over a three‐year period (2008‐2010), when the Malaysian business environment was characterized by a number of major events such as the recent 2008/2009 global financial crisis and corporate governance restructuring.Design/methodology/approachA checklist was constructed to measure the extent and quality of ICD in Malaysian corporate annual reports. The extent of ICD was measured on a dichotomous basis (0, 1) while the quality of ICD was measured using a four‐point scale (0‐3).FindingsThe results showed an increasing trend of the ICD and a significant overall increase by the sample Malaysian companies. The results also revealed that there are significant differences between the categories of the IC disclosures, with external capital related information accounting for the largest portion. However, only human capital disclosures significantly increased over time.Practical implicationsThe time series analysis carried out in this study observed that, despite the general ICD increasing trend, item‐specific analysis showed inconsistent results. Hence, the regulators may want to devise reporting guidelines for IC for Malaysian public listed companies.Originality/valueThis paper is one of the few which investigate trends in ICD following significant changes in the business environment in an attempt to determine if those changes have some impact on ICD practices.

Intellectual capital reporting by the New Zealand local government sector

Purpose – The purpose of this paper is to assess the extent and quality of intellectual capital disclosures (ICDs) in the annual reports of the New Zealand local government sector.Design/methodology/approach – This paper makes use of an ICD index constructed through a participatory stakeholder consultation process to develop a disclosure index which measures the extent and quality intellectual capital reporting in the 2004/2005 annual reports of 82 local government authorities in New Zealand. The final index comprised 26 items divided into three categories: internal, external and human capital.Findings – The results indicate that the reporting of intellectual capital by local government authorities is varied. The most reported items were joint ventures/business collaborations and management processes, while the least reported items were intellectual property and licensing agreements. The most reported category of intellectual capital was internal capital, followed by external capital. Human capital was th...