Intellectual capital disclosures in an emerging economy: status and trends

Abstract

Purpose The purpose of this paper is to study the status and trend of intellectual capital disclosures by selected companies in India. Three categories of intellectual capital disclosures across six industry groups were measured. The relation of the three categories of disclosures, i.e. human capital, relational capital and structural capital disclosures with the measures of organisational performance such as sales, R&D, R&D intensity, net profit and export intensity has also been studied. Design/methodology/approach Based on National Industrial Classification 2008, six sectors, namely pharmaceutical, basic metals, industrial manufacturing, energy, financial services and information technology were included in the study and 20 companies were selected from each sector based on the availability of data from 2004-2005 to 2013-2014, thus, making a sample of 1,200 firm-years. For collecting the data, a list of keywords related to various dimensions of intellectual capital was prepared and the count of keywords was searched in the annual reports of the companies. Findings Significant and positive trend coefficients were found in the majority of the sectors. Analysis revealed that trend coefficients differed across various sectors indicating the presence of sector specificity. Results of trend analysis reveal that structural capital-related disclosures have stagnated in case of pharmaceutical sector after hitting the peak. Significant variations were found across sectors in terms of all three types of intellectual capital disclosures. Results of study empirically support the fact that intellectual capital disclosures tend to increase with size of the organisation. Research limitations/implications As data have been collected from annual reports of the companies, the accuracy of the findings is limited to the accuracy of the reported data. Originality/value The study is an original piece of work. This study provides an insight into the disclosure trend of intellectual capital in an emerging economy.

The impact of intellectual capital on performance in Brazilian companies

“…Organizations are involved in joint ventures and collaboration in order to increase an organization's brand value (Sharma & Dharni, 2017).…”

“…Abstract Purpose \u2013 The purpose of this paper is to empirically examine the effect of intangible resources, i.e. intellectual capital (IC; Sharma & Dharni, 2017). In this sense, IC has become an important tool for companies' economic value creation (Jordão & Almeida, 2017).…”

“…This situation has arisen due to the globalization process as well as due to increasing breakthroughs in areas such as production technology, computing and telecommunications (Osinski et al, 2017). All these transformations suggest a new outlook and interpretation on society as a whole (Zerenler et al, 2008;Sharma & Dharni, 2017).…”

Accounting treatment of brand as an intangible asset of enterprises

“…The brand gives the company a personality that helps consumers to create certain expectations about the quality of the company (Wasserman, 2015, p. 12). The brand can significantly affect the value of the product and its market position, especially in industries such as pharmaceutical or cosmetic (See more: Sharma & Dharni, 2017). Such a claim actually provides us with evidence that the brand generates economic benefits, as well as other assets, which makes it necessary to value and recognize it.…”

Extent and gaps in intellectual capital disclosure in the Indian industry

“…However, these were conducted with respect to a specific sector and not across all sectors. Sharma and Dharni (2017) attempted to study the status and trend of intellectual capital disclosures by selected companies in India and observed that trend coefficients differed across various sectors indicating the presence of sector specificity. No study has attempted to examine the gap between actual disclosures and expectation of stakeholders.…”