Intellectual capital disclosure determinants and its effects on the market capitalization: evidence from Indonesian listed companies

Abstract

Abstract. Currently, intellectual capital (IC) is the main source of company's competitive advantage. The role of IC has become one of the main factors of company's value creation process. Since companies rely more on their intangibles (including IC), management must provide an appropriate annual report in which discloses information regarding IC in order to give better information to the related parties. The aim of this study is to examine variables that expected to have a significant influence to the level of intellectual capital disclosure (ICD) practices in Indonesian listed companies' annual reports. A content analysis method is used to examine the ICD level, based on the framework developed by [1]. The IC information was collected from 135 Indonesian LQ45 listed companies, which derived from their annual reports from the year 2012 to 2014. Sample companies are classified into two groups of industries: high-and low profile industries in order to analyze differences in IC reporting practices between the two groups. The empirical results proved that company size, industry type and market capitalization are significantly associated with the ICD, while the influence of company profitability on the level of ICD is not significant. Furthermore, it is revealed that there is no significant difference in the intellectual capital disclosure practices between companies in high-and lowprofile industries.

Intellectual Capital Disclosure, Information Asymmetry, Cost of Capital, and Firm Value: Empirical Studies on Indonesian Manufacturers

“…*p < .10, **p < 0.05, ***p < 0.001 (two-sided test). Orens et al, (2009); Mansour et al, (2014); Ferchichi and Paturel (2013); Dashti et al, (2016); Alfraih et al, (2017); Sudibyo and Basuki (2017); Subaida, Nurkholis and Mardiati (2017). As signaling theory proposes that voluntary disclosure such as intellectual capital information allow investors and other relavant staekholders to produce a better assessment about the organization"s values and their ability to generate future wealth.…”

Corporate governance on intellectual capital disclosure and market capitalization

“…This, therefore, means companies with better disclosure have the possibility of benefitting more economically (Orens et al, 2009). This study examines the effect of intellectual capital disclosure on market capitalization, however it does not test with experimental methods such as Sudibyo and Basuki (2017) research because the results of the study indicate that there are no significant differences in the practice of intellectual capital disclosure between companies in high and low profile industries.…”

“…The current era of globalization in the field of new economics is a shift in the economy based on the knowledge economy, which is the competitiveness and sustainability of companies increasingly dependent on knowledge-based resources (Sudibyo & Basuki, 2017). The dramatic shift from material sources to knowledge, then, from hardware to software is actually experienced by…”

Impact of Intellectual Capital on Financial Reporting Quality of Selected Banks in Nigeria

“…The dramatic shift from material source to knowledge, from hard ware to software is actually experiencing by companies across the world. Sudibyo and Basuki(2017) with the advent of knowledge-based economy knowledge or intellectual capital become more important in company with other production factors such as land ,capital and machinery, so that in this economy, knowledge is considered as the most important production factor and it is named as the most important completion advantage of organisations, Darabi,Radand Heideribali(2017).…”