Voluntary 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.

Managerial Motivations on Voluntary Intellectual Capital Disclosure in Hong Kong

Managerial Motivations on Voluntary Intellectual Capital Disclosure in Hong Kong

The Voluntary Disclosure of Intellectual Capital and Its Impact on Level of Growth in Hong Kong Companies: Annual Reporting Trends over an 8-Year Period

The Voluntary Disclosure of Intellectual Capital and Its Impact on Level of Growth in Hong Kong Companies: Annual Reporting Trends over an 8-Year Period

Intellectual capital disclosure and its determinants in healthcare organisations – Evidence from Italy

PurposeThe present study aims to extend the knowledge of intellectual capital disclosure (ICD) disclosure practices in the Italian Healthcare Organisations (HCOs) context. The ultimate goal of the study is to provide fresh insight into the possible explanatory factors that may drive the extent of ICD provided by Italian HCOs via the web.Design/methodology/approachThe present study applies a manual content analysis on the websites of a sample of 158 HCOs to determine the level of voluntary ICD. A multivariate regression model is estimated to test the association between different variables – size, gender diversity in top governance positions, financial performance and indebtedness – and the level of ICD provided by sampled HCOs through their official websites.FindingsContent analysis results reveal that – in the absence of mandatory requirements – Italian HCOs tend to use websites to disclose information about IC. Particular attention is devoted to Structural and Relational Capital. The statistical analysis pinpoints that size and indebtedness negatively influence the level of ICD. In contrast, the presence of a female General Manager (GM) positively drives ICD. Also, it is observed that Research and University HCOs and those located in the Italian Northern Regions are particularly prone to discharge accountability on IC through websites.Originality/valueTo the best of the authors’ knowledge, this is the first study that examines voluntary ICD practices through websites in the Italian HCOs' context. Also, since prior studies on IC in the healthcare context are mainly descriptive or normative, this is the first study examining the potential determinants of ICD provided by HCOs in terms of size, gender diversity in top governance positions, financial performance and indebtedness.

Exploring intellectual capital disclosure and its determinants in knowledge-based institutions: empirical evidence from international universities

PurposeThis study aims to add empirical evidence to the intellectual capital (IC) literature by enhancing understanding of voluntary online IC disclosure (ICD) practices in knowledge-based institutions such as universities from an international standpoint. The ultimate purpose of this study is to examine how different variables related to size, internet visibility and certain corporate governance attributes (i.e. board size and board gender diversity) affect the extent to which universities from different world’s countries convey ICD through websites.Design/methodology/approachThis study investigates a sample of 100 international universities selected according to the QS World University Rankings 2020 to examine the level of ICD provided through their official websites. It uses a content analysis to measure the actual amount of IC information disclosed by these universities and a regression model to test the impact of the explanatory variables.FindingsEmpirical results demonstrate a negative impact of the board size and a positive effect of board gender diversity and internet visibility on the level of IC information disclosed by international universities on their website. They also demonstrate a non-significant effect of university size.Originality/valueThis study contributes to enriching the academic literature in different ways. In the first place, it extends the field of application of the stakeholder theory. In the second place, this study sheds light on the actual ICD level of international universities. In the third place, it examines the ICD through a channel – websites – which are still little explored by the academic literature. Finally, this study increases knowledge about the factors that can influence the ICD disclosure of international universities.

The role of social media as a voluntary intellectual capital disclosure in university: Evidence from Indonesia

Purpose: This paper explains the influence of social media as voluntary disclosure of intellectual capital in university performance.Design/methodology/approach: We conduct an analysis of all universities in Indonesia and observe social media accounts that are used, such as Facebook, Instagram, Twitter, and YouTube channels, and then correlate with university performance.Findings: The results show that social media can be used as a voluntary disclosure of intellectual capital. The popularity of a university in social media has a positive correlation with the performance of relational capital and institutional performance. We have not found the impact on the number of students. We also find a significant difference in the use of social media between public and private universities in Indonesia.Research limitations/implications: Data comes from one country. Therefore, it may be possible to analyze several countries with different social media platforms in the futurePractical implications: Viewed from a strategic management perspective, we see an opportunity for universities to manage social media that is used effectively. This will have an impact on increasing popularity in cyberspace and institutional performance. We recommend that universities have a special part in managing their social media content in order to be able to develop and manage digital communications effectively as a strategy to improve the performance of institutions.Social Implications: Social media plays an important role in improving the performance of an organization and informing stakeholders. Besides that, the existence of intangible assets also plays an important role in the existence of an organization.Originality/value: The paper specifically empirically examines the impact of using social media on public sector organizations (universities), we focus on the role of social media as voluntary disclosure from the performance of intellectual capital.

Impact of Board Diversity on Voluntary Disclosure of Intellectual Capital: Evidence from Listed Non-Financial Services Firms in Nigeria

This study aims to examine the impact of board diversity on intellectual capital disclosure of forty-four listed non-financial services firms in Nigeria during the period of ten years from 2011-2020. The study analysed the data by means of descriptive statistics to provide summary statistics for the variables. Similarly, the study adopted Robust ordinary least square (OLS) regressions to test the study hypotheses using STATA software. The regression results revealed that board size has significant positive impact on intellectual capital disclosure. However, the finding of the study revealed that board nationality and board composition have significant negative impact on intellectual capital disclosure. Emphasis should be placed on the numbers and quality of members and their effectiveness in enhancing more intellectual capital disclosure of the firms. To protect the interest of foreign and other investors, there should be increase in the percentage of foreign members on the board of listed non-financial services firms in Nigeria. Additionally, foreign members on the board should ensure that they attend board meeting regularly. Finally, to enhance board independence and effectiveness in monitoring the management, there should be limit to the tenure of non-executive directors and their independence should be protected so as to improve their capacity and capability of monitoring management to disclose more information on intellectual capital voluntarily.

Drivers of voluntary intellectual capital disclosure in agriculture companies listed in IMT-GT countries

Drivers of voluntary intellectual capital disclosure in agriculture companies listed in IMT-GT countries

Gender diversity and online intellectual capital disclosure: Evidence from Italian‐listed firms

The present research investigates the impact that certain gender diversity attributes exert on online intellectual capital (IC) disclosure in the context of Italian‐listed firms where regulations promoted gender balance in the governing bodies. The websites of a sample of 123 Italian listed companies are content‐analyzed to retrieve the level of voluntary IC disclosure (ICD). Drawing on Agency and Resource Dependence theory perspectives, an Ordinary Least Squares (OLS) regression model, is estimated to test the association between online ICD and different gender diversity measures, specifically: the proportion of women on boards and the presence of female Chairpersons and female CEOs. The content analysis results show that listed companies in Italy make extensive disclosure of IC on their websites. The results based on the regression analysis confirm that women's presence on boards is conducive to higher voluntary ICD. The analysis also demonstrates that Italian‐listed firms tend to convey more voluntary information on IC resources when a woman is appointed as a CEO. To the best of the authors' knowledge, this is the first study that provides a snapshot of the potential association between gender diversity—in terms of both the proportion of women on the boards and the presence of women in top executive positions—and the level of web‐based ICD.

Unveiling the link between performance and Intellectual Capital disclosure in the context of Italian Public universities

This work aims to explore the relationship between academic performance and voluntary Intellectual Capital (IC) disclosure in the context of Italian Public Universities. This study applies a content analysis to investigate the extent of voluntary Intellectual Capital disclosure (ICD) provided through performance reports by a sample of 59 Italian public universities. Four multivariate regression models are estimated to examine the associations between academic performance and the level of ICD and its sub-components, namely Human Capital, Structural Capital and Relational Capital. The content analysis findings show that Italian public universities place a high value on disclosing human capital information. The results based on the multivariate analysis confirm the view that, in the case of higher performance, Italian Public Universities tend to convey a greater extent of information on both IC and its sub-components. This study broadens the scope of mainstream ICD literature's actions by bringing new expertise about the interconnections between university performance and voluntary ICD provided via performance reports. Connecting university performance to ICD can enhance the practical and theoretical understanding of the role that ICD may exert for universities to signalling their excellence and explain to stakeholders how they create value and achieve superior performance, focusing on their strategic - IC-based resources.

Voluntary intellectual capital disclosure and earnings forecast in Indonesia–Malaysia–Thailand growth triangle's pharmaceuticals sector

PurposeThis study examines the role of intellectual capital disclosure (ICD) on earnings forecasting by analysts in the pharmaceutical industry in emerging countries, particularly in Indonesia, Malaysia and Thailand. This study specifically examines the role of each component of the ICD on analysts' forecasts, which consists of errors of forecasted earnings, the standard deviation of forecasted earnings and analyst recommendations.Design/methodology/approachPanel data analysis is conducted using a sample of 17 companies from pharmaceuticals industries in Indonesia, Malaysia, Thailand – Growth Triangle (IMT-GT), which are listed in the Indonesia Stock Exchange (IDX), Malaysia Stock Exchange (MYX) and Stock Exchange of Thailand (SET) from 2010 to 2017. Secondary data is obtained from Bloomberg and Annual report, where they are being analyzed to measure the ICD and gather the control variables.FindingsThe results indicate that the three components of ICD, namely human capital disclosure (HCD), structural capital disclosure (SCD) and relational capital disclosure (RCD), insignificantly influence average analysts' consensus recommendation and analysts' earnings forecast dispersion. However, the findings show a significant negative influence of relational capital disclosure (RCD) on analysts' earnings forecast error. In contrast, HCD and SCD have an insignificant impact.Practical implicationsTransparency in disclosing activities related to external parties is essential for the pharmaceutical industry. It is found that relational capital disclosure is the only ICD indicator that can strengthen analysts' profit predictions. Transparency about company activities in maintaining customer satisfaction and activities related to strategic alliances with other organizations are two critical things that can accommodate the accuracy of earnings forecasting from analysts in pharmaceutical companies.Originality/valueThis study contributes to ICD-related research by discussing the financial analyst's response to this voluntary disclosure in the pharmaceutical industry, particularly in Indonesia, Malaysia and Thailand. The selected observation period is seven years, starting one year after the global financial crisis. The results showed that the disclosure of IC is not an exciting thing for financial analysts. In forecasting current earnings, financial analysts are more interested in errors than the previous year's estimates.

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.

Drivers of voluntary intellectual capital disclosure in agriculture company listed in IMT-GT countries

Drivers of voluntary intellectual capital disclosure in agriculture company listed in IMT-GT countries

Does value added of intellectual capital influence voluntary disclosure? The moderating effect of CSR practices

Research Question: Does the effect of corporate social responsibility (CSR) practices and value added of intellectual capital (VAIC), is contingent on the intellectual capital (IC) information disclosure policy adoption in the Environmental, Social and Governance (ESG) companies? Does CSR have a moderating effect on the relationship between VAIC and IC disclosure? Motivation: The majority of the literature has examined the effect of value added and social responsibility on the overall transparency of the business while neglecting their effect on the voluntary intellectual capital disclosure. Our study seeks to fill this gap by testing the moderating effect of socially responsible practices on the relationship between VAIC and voluntary IC disclosure. This paper is the first comprehensive attempt to analyses the interaction between CSR practices and VAIC with voluntary IC disclosure. Idea: This study examines how CSR practices moderate the relationship between the added value of intellectual capital (VAIC) and voluntary disclosure of IC in the world's most committed ESG companies in business ethics. Data: The data were collected from Thomson Reuters ASSET4 database from four countries to analyze data of 153 listed companies selected from the Environmental, Social and Governance (ESG) index between 2015 and 2019. Tools: To test study’s hypotheses, we applied linear regression with a panel data using the Thomson Reuters ASSET4 database. Findings: Two main results can be derived: First, the integration of CSR into company strategy is positively associated with voluntary IC disclosure. Second, the interaction between CSR practices and VAIC is a determinant of this type of disclosure to reduce the asymmetry of information and the conflict of interest. Contribution: The majority of the literature has examined the effect of value added and social responsibility on the overall transparency of the business while neglecting their effect on the voluntary intellectual capital disclosure. Our study seeks to fill this gap by testing the moderating effect of socially responsible practices on the relationship between VAIC and voluntary IC disclosure. This paper is the first comprehensive attempt to analyses the interaction between CSR practices and VAIC with voluntary IC 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.

Do companies disclose intellectual capital in their annual reports? New evidence from explorative content analysis

PurposeThis study suggests an alternative to confirmatory content analysis (CA) and empirically demonstrates that explorative CA enables new insights into the mechanism of intellectual capital (IC) disclosure. In so doing, this research contributes to both methodological and empirical advancements in IC disclosure research.Design/methodology/approachEmploying the assumptions of positive accounting theory and taking book value of intangible assets as a reference, our research design utilizes well-established text-mining (TM) tools based on a least absolute shrinkage and selection operator regression. We assume that the degree of cohesion between officially disclosed and evaluated intangible assets on balance sheets and those contextually delivered in narrative form may affect how IC is ultimately disclosed in annual reports.FindingsOur main finding is in line with the results and criticism of previous studies. We show that companies do not extensively disclose IC in their annual reports. However, some narrative forms for IC disclosure are identified and confirmed by several robustness checks.Research limitations/implicationsFirst, the findings provide internal validity only for large US enterprises. These firms have similar, well-structured reporting requirements. This analysis might be enriched by an examination and a comparison of different institutional contexts, such as emerging countries. Second, following previous studies, annual reports serve as the source of data. Consequently, the findings are relevant only for mandatory and voluntary disclosure of IC, mitigating the relevance of this study for contexts of involuntary disclosure.Originality/valueThis study makes two contributions. First, we add to the empirical literature by offering one more piece of evidence on whether and, if so, the extent to which companies disclose IC in their annual reports. Second, we provide further examination of confirmatory CA by proposing a number of statistically validated codes and tokens that are indicators of IC communication by companies.

Role of Corporate Governance in the Voluntary Disclosure of Intellectual Capital

The research on intangible assets and its contribution to the value creation of the firms has received significant attention in recent times. This paper attempts to estimate and analyse the nature and extent of overall Intellectual Capital Disclosure (ICD) and its sub-components in the annual reports of Information Technology (IT) industry in India for the FY 2017-18. It also attempts to examine whether Corporate Governance Characteristics of these firms influence their ICD. Multiple linear regression analysis is used to evaluate the data on information technology Industry. IT firms in India disclose a very high extent of Human capital; whereas the nature of disclosure is high in case of Structural Capital. The empirical evidence suggests that board size, its independence and ownership pattern of the firm play a significant role in the extent of overall intellectual capital disclosures in Indian IT firms. Keywords : Intellectual capital, Corporate Governance, Board Size, Information Technology, India. * Department of Economics University of Mumbai, Vidyanagari, Mumbai 400 098 https://doi.org/10.21632/irjbs.12.3.243-256

Does board gender diversity influence voluntary disclosure of intellectual capital in initial public offering prospectuses? Evidence from China

AbstractResearch question/issueUsing a multitheoretic view of boards, this study examines the impact of boardroom gender diversity (BGD) on voluntary intellectual capital (IC) disclosure in initial public offering (IPO) prospectuses in China—the world's second‐biggest economy, which is moving from a planned economy to a market‐oriented one. Furthermore, this study also investigates the impact of family ownership on the relationship between BGD and IC disclosure in the Chinese environment, which is characterized by less‐developed corporate governance mechanisms.Research findings/insightsBased on a comprehensive content analysis of Chinese IPO prospectuses between 2009 and 2017 and measuring disclosure index at 78 dimensions under six broad categories of IC, the empirical results document (a) a significant positive relation between BGD and IC disclosure—in line with resource dependence theory, (b) a significant negative impact of female independent directors on IC disclosure—opposite to agency theory predictions, and that (c) the BGD–IC disclosure relationship is generally stronger for firms with two or more women on boards—in line with critical mass theory in China. Finally, this study also reveals that family ownership has adverse impacts on the BGD–IC disclosure relationship. These results are robust to a battery of sensitivity analyses.Practitioner/policy implicationsThis study provides positive capital market implications of BGD through enhanced IC disclosure in IPO prospectuses. In doing so, the study has important implications for regulators and top management teams in devising policies concerning female representation on boards and voluntary disclosure of IC to inform the market participants of the true value of the company.

Effects of voluntary intellectual capital disclosure for disclosing firms

Purpose Mandatory disclosure of a firm’s intellectual capital (IC) is restricted by accounting regulations, leading companies to use voluntary disclosure to inform their stakeholders about their IC. However, voluntary IC disclosure (ICD) is costly and may lead to a leak of knowledge. Consequently, firms should only engage in voluntary ICD if it really reduces information asymmetries and leads to reduced cost of capital or a better reputation. The purpose of this paper is to review, integrate and critically discuss the results of studies examining various effects of voluntary ICD. Design/methodology/approach The authors use a structured literature review approach. Findings The results mainly support the expected positive effects of voluntary ICD on monetary value for disclosing firms, e.g. lower cost of capital, higher firm value or increased analysts’ following. Nevertheless, the studies mainly represent second stage IC research. Research limitations/implications Additional studies concerning effects of voluntary ICD outside capital markets are recommended. Future studies should be based on an improved study design concerning the theoretical underpinning and concept of value relevance, sufficient sample sizes and alternative sources of ICD. Practical implications Due to positive monetary effects, firms should engage in voluntary ICD. Originality/value The paper reviews and integrates the state-of-the-art of empirical research of effects of voluntary ICD. It contributes to and enlarges the debate concerning the value relevance of voluntary ICD with respect to the different stages of IC research.

The Impact of Voluntary Disclosure of Intellectual Capital on the Stock Return in Listed Companies of Tehran Stock Exchange

In this Study, the effect of voluntary disclosure of Intellectual capital information on the stock return of the listed companies in Tehran Stock Exchange will be discussed. Methodology: According to Li (2007) and Ibikunle (2013), a dummy variable was defined and the required items for intellectual disclosure were designed. Then, by assessing the items in the board directors’ report, number 1 was assigned to the items evident and zero to those forgone. In the end, a score for each company was determined to expose the intellectual capital disclosure. 137 companies were selected by systematic samplings for a period of 5 years (2010-2014) and appropriate statistical tests were applied. Results: By referring to the financial statements and reports of the board of directors wanted data for companies were collected Data analysis included multiple regressions using panel data and fixed effects. Conclusion: The results showed that voluntary disclosure of intellectual capital has a positive and significant impact on the stock return of those companies. This result is in compliance with the past finding of Li (2007).