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Capital market pressures and the format of intellectual capital disclosure in intellectual capital intensive firms

Author

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  • Jing Li
  • Musa Mangena

Abstract

Purpose - – A number of studies have examined firms’ intellectual capital (IC) disclosure practices. However, the presentation format of IC disclosure (text, numerical and graphs/pictures) is yet to be examined. In addition, there is little evidence on the impact of capital market pressures on IC disclosure. The purpose of this paper is to examine the relation between presentation format of IC disclosures and three market factors (market-to-book ratio, share price volatility and multiple listing (ML)). Design/methodology/approach - – Using content analysis, the authors examine the level of IC disclosure provided in the annual reports of 100 IC-intensive listed UK firms. A 61-IC-item research instrument is used to measure IC disclosure and regression analysis is employed to examine the relation between disclosure and the market factors, controlling for corporate governance and firm-specific variables. Findings - – Text is the most commonly used format for IC disclosure, whilst the use of graphs/pictures is very low. The findings of the relation between market factors and IC disclosure are mixed. Market-to-book ratio is significantly related to disclosure in text and numerical, but not to graphs/pictures. Share price volatility is only associated with graphs/pictures, whilst ML is only related to text. Originality/value - – The authors findings suggest that the impact of capital market pressures on IC disclosure might differ with presentation format. In this context, the study makes a significant contribution to the IC disclosure literature.

Suggested Citation

  • Jing Li & Musa Mangena, 2014. "Capital market pressures and the format of intellectual capital disclosure in intellectual capital intensive firms," Journal of Applied Accounting Research, Emerald Group Publishing Limited, vol. 15(3), pages 339-354, November.
    • Handle: RePEc:eme:jaarpp:v:15:y:2014:i:3:p:339-354
    DOI: 10.1108/JAAR-12-2013-0117
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    Citations

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    Cited by:

    1. Muhammad Rifky Santoso & Rina Br Bukit, 2019. "The Determinant Factors Of Automotive Industry Investment Decision In Indonesia," Junior Scientific Researcher, SC Research Publishing SRL, vol. 5(1), pages 3-17, May.
    2. Robert Rieg & Ute Vanini, 2023. "Value relevance of voluntary intellectual capital disclosure: a meta-analysis," Review of Managerial Science, Springer, vol. 17(7), pages 2587-2631, October.
    3. Santoso, Muhammad Rifky & Bukit, Rina Br, 2019. "The determinant factors of automotive industry investment decision in Indonesia," MPRA Paper 95518, University Library of Munich, Germany.

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