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The Impact of Intellectual Capital Disclosure and Information Asymmetry on the Cost of Equity Capital: an Empirical Investigation in Indonesia

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  • Bambang Hadi Prabowo

    (Institute of Economic Science of Jaya Negara Malang, Indonesia)

Abstract

This research aims to analyze the impact of Intellectual Capital Disclosure and Information Asymmetry on Cost of Equity Capital and stock prices. It used purporsive sampling and studied LQ 45 companies enlisted in 2014-2015 Indonesia Stock Exchange. The research data gathered through non-partisan observation method and then analyzed with PLS analysis equation. The result shown: (1) Information Asymmetry has positive significance towards stock price; (2) Intellectual Capital has insignificant positive influence towards stock price; (3) Intellectual Capital has insignificant positive influence towards Cost of Equity Capita; (4) Information Asymmetry has insignificant positive towards Cost of Equity Capital; (5) Cost of Equity Capital has insignificant negative influence towards stock price. This research result validate previous researches’ findings especially in agency theory and asymmetry theory. Key Words:Cost of Equity Capital, Intellectual Capital, Information Asymmetry

Suggested Citation

  • Bambang Hadi Prabowo, 2017. "The Impact of Intellectual Capital Disclosure and Information Asymmetry on the Cost of Equity Capital: an Empirical Investigation in Indonesia," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 6(5), pages 01-12, September.
    • Handle: RePEc:rbs:ijbrss:v:6:y:2017:i:5:p:01-12
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    References listed on IDEAS

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    1. Leuz, C & Verrecchia, RE, 2000. "The economic consequences of increased disclosure," Journal of Accounting Research, Wiley Blackwell, vol. 38, pages 91-124.
    2. Christine Botosan, 2006. "Disclosure and the cost of capital: what do we know?," Accounting and Business Research, Taylor & Francis Journals, vol. 36(S1), pages 31-40.
    3. Dimitrios Maditinos & Zeljko Sevic & Charalampos Tsairidis, 2010. "Intellectual Capital and Business Performance: An Empirical Study for the Greek Listed Companies," European Research Studies Journal, European Research Studies Journal, vol. 0(3), pages 145-168.
    4. Healy, Paul M. & Palepu, Krishna G., 2001. "Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 405-440, September.
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