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Value Relevance of Intellectual Capital Reporting in Top Nigerian Firms

Author

Listed:
  • Victor Chiedu OBA

    (Nasarawa State University, Nigeria)

  • Nana BATURE

    (Nasarawa State University, Nigeria)

Abstract

The purpose of this study is to examine the link between corporate financial performance and Intellectual capital disclosures among top Nigerian companies for a four year period from 2006 to 2009. Return on capital employed was utilized as a proxy for financial performance while an Intellectual capital disclosure index was developed to capture the extent to which such voluntary disclosure was made. The study employed board nationality diversity as a moderating variable in the investigated relationship. This was denoted as the number of nationalities found on the board. A multiple regression analysis was used to investigate the potential relationship existing among the variables. Results of this study show that intellectual capital disclosures have a positive significant impact on financial performance while board nationality diversity has no impact on financial performance. The findings in this study provide some evidence supporting the signals theory whereby voluntary disclosure practices inform stakeholders of certain vital information which are critical in investment decision making and consequently have a return effect on corporate financial performance. The study thus recommends that firms adopt a holistic voluntary disclosure framework in order to enjoy associated economic benefits that accrue in this vein.

Suggested Citation

  • Victor Chiedu OBA & Nana BATURE, 2013. "Value Relevance of Intellectual Capital Reporting in Top Nigerian Firms," EuroEconomica, Danubius University of Galati, issue 2(32), pages 141-147, September.
    • Handle: RePEc:dug:journl:y:2013:i:2:p:141-147
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    File URL: http://journals.univ-danubius.ro/index.php/euroeconomica/article/view/1874/1956
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    References listed on IDEAS

    as
    1. Victor Chiedu Oba & Musa Inuwa Fodio & Benedict Soje, 2012. "The Value Relevance of Environmental Responsibility Information Disclosure in Nigeria," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 8(6), pages 99-112, December.
    2. Lev, B & Zarowin, P, 1999. "The boundaries of financial reporting and how to extend them," Journal of Accounting Research, Wiley Blackwell, vol. 37(2), pages 353-385.
    3. Jing Li & Richard Pike & Roszaini Haniffa, 2008. "Intellectual capital disclosure and corporate governance structure in UK firms," Accounting and Business Research, Taylor & Francis Journals, vol. 38(2), pages 137-159.
    4. Amir, Eli & Lev, Baruch, 1996. "Value-relevance of nonfinancial information: The wireless communications industry," Journal of Accounting and Economics, Elsevier, vol. 22(1-3), pages 3-30, October.
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