Factors explaining the level of voluntary human capital disclosure in the brazilian capital market

Abstract

This paper presents a study on factors explaining the level of voluntary human capital information in companies with shares in the Brazilian stock exchange. Assuming the existence of information asymmetry between managers and shareholders, agency theory states that disclosure might lead to a reduction in agency costs. The proprietary costs theory indicates that information disclosure might increase the company's costs. According to these theories, the likelihood that the managers will voluntarily disclose information depends on certain factors that are characteristic of the company. Understanding the disclosure of information regarding intangible assets, specifically human capital, has strategic relevance for enterprises because these features, although not always recorded in accounting, represent a competitive business edge in the current economy. Design/methodology/approach: The study examined 145 annual reports, representing 29 companies in the period of 2005-2009. The level of voluntary disclosure was determined through content analysis of annual reports using representative indicators of human capital information. Findings: The statistical results indicate that factors such as size, debt, growth and time of registration with the Brazilian Securities and Exchange Commission explain the level of voluntary human capital disclosure of the companies studied. Originality/value: An important contribution of this research is the formulation and non-repudiation of the time of registration with the CVM hypothesis as a factor that-305-Intangible Capital-http://dx.doi.org/10.3926/ic.315 explains the level of human capital disclosure because none of the revised studies have tested this hypothesis.

The Effect of Size, Firm Age, Growth, Audit Reputation, Ownership and Financial Ratio on Intellectual Capital Disclosure

“…Firm age is the length of time the company to conduct its operations and maintain its existence in the world of business (Nugroho 2012). The longer the company can survive, showing that the company is able to maintain the going concern of its operations (Fontana and Macagnan 2012). Companies that existed long enough is generally considered to be more widespread disclosure compared with younger companies (Ansah 1998).…”

“…Leverage is the amount of company assets that come from having a fixed load funds, where the assets are used to increase the level of income of the company (Weygandt et al 2015). The company will be required to be more thorough disclosure with for their demands on loan, either directly or indirectly from creditors because lenders require comprehensive information regarding the company to then make decisions (Alsaeed 2006, Fontana andMacagnan 2012). From the explanation above, then the hypothesis to be tested are as follows:…”

Influence of Intellectual Capital Investment, Risk, Industry Membership and Corporate Governance Mechanisms on the Voluntary Disclosure of Intellectual Capital by UK Listed Companies

“…Smooth transitions in share prices suggest the absence of information asymmetries between the company and shareholders, or among investors, low levels of volatility suggest fewer information asymmetries (Leuz & Verrecchia, 2000). Guo, Lev, and Zhou (2004) and Fontana and Macagnan (2013) find that increased disclosure results in narrower bid-ask prices and lower stock volatility. Furthermore, Lev and Sougiannis (1999) argue that IC intensive companies SHVOL is likely to be higher, and may only be mitigated if non-financial information on the application of IC to generate competitive advantage is disclosed (Amir & Lev, 1996).…”

“…A higher GRWT is expected to lead to more voluntary disclosure as management signal the realisation of company potential previously held in IA (Fontana & Macagnan, 2013). Management of high GRWT companies may signal IC to indicate company success (economic theory), management expertise and competence (agency theory) and to maximise shareholder value in the markets (shareholder maximisation).…”

The Emergence Of Human Capital Disclosure: Exploring The Influence Of Board Composition

“…A company's HC is viewed as a form of valuable resources in creating a sustainable competitive advantage. According to Fontana and Macagnan (2013), an efficient HC can develop better business opportunities and create new ideas, increases a company's confidence and makes it less vulnerable when facing any risks. Therefore, it is important for a company to have an effective HC (Felicio, Couto, & Caiado, 2014).…”