Italian annual intellectual capital disclosure

Abstract

In recent years a world-wide debate has emerged on the future of business reporting. There is growing agreement that traditional financial reporting is inadequate in meeting with the information needs of stakeholders, particularly in a knowledge economy characterised by a rapidly emerging emphasis on intellectual capital (IC). This study examines voluntary intellectual capital disclosure (ICD) provided by listed Italian companies in annual reports from the year 2001. The study aims to answer two research questions namely: what is the amount and content of ICD; and what are the factors that influence different voluntary reporting behaviours. In relation to amount and content of information disclosed, the results are consistent with previous ICD studies showing extensive disclosure of external capital (in particular about "customers"). Regarding the factors that can explain different voluntary reporting practices, findings suggest that industry and size are not important in determining the content of information disclosed, however, as found in social and environmental disclosure (SED) studies, these factors are relevant in explaining the amount of information disclosed. In summary, this paper highlights the ICD practices of Italian listed companies by examining their annual reports, and compares these results with a number of previous national studies.

Relationship between Unionized Companies, Government Ownership and Reporting Human Capital Information in Corporate Annual Reports

“…Disclosure index was extensively used in intellectual capital and human capital disclosure studies (e.g., Guthrie & Petty 2000;Bozzolan et al 2003;Dominguez 2011;Mubarak & Ahmed Haji 2014). However, the index also has a few flaws because the method does not count repeated information (see Bettie and Thomson 2007), which could reflect the importance attached to the messages being conveyed.…”

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

“…Davison and Skerratt (2007) provide evidence that within the top 100 UK companies, 94% of pictures communicated intangible aspects of companies businesses. As illustrated in Table 1.2 the 23 IC attributes have been identified as representative of the spread of IC attributes that may bring comparability to existing IC studies (Guthrie et al, 2004;Bozzolan et al, 2003). To ascertain that the scoring was consistent and accurate according to the chosen scoring procedure a verification test was carried out by three researchers from the field in a similar process as that conducted by Guthrie and Petty (2000).…”

“…In terms of the theoretical approach, the paper refers to Abeysekera (2006) who outlines the development of a theoretical framework underlying IC disclosure. Theories that have been considered include legitimacy and stakeholder (Guthrie, Petty, Yongvanich, & Ricceri, 2004;Abeysekera & Guthrie, 2005;Michelon, 2011), signalling (Bozzolan, Favotto, & Ricceri, 2003;Garcia-Meca & Martinez, 2005;Shi, Kim, & Magnan, 2014), resource based (Barney, 2001;Palmer, 2008), agency (Bozzolan et al, 2003;Garcia & Martinez, 2005) and information asymmetry (Amir & Lev, 1996;Lang & Lundholm, 2000). Although the IC literature illustrates the application of various theoretical approaches, the general disclosure literature has overall indicated a close association with agency and signalling theories.…”

“…TMRK is the LSE international market for innovative technology companies and includes computer hardware, computer servicing, internet, semi-conductors, software, telecom equipment, biotechnology, specialist pharmaceuticals, drug delivery and medical technology. Following Bozzolan et al (2003), the expectation is of a positive significant association. Listing on this exchange may be justified through signalling theory as the company promotes its R&D and technological development.…”

“…A content analysis of the entire annual reports of a sample of listed companies was conducted by adapting the methodologies of Guthrie, Petty, Ferrier, & Well, (1999), Bozzolan et al, (2003) and Milne and Adler (1999). This involves codifying IC attributes into SC, RC and HC in order to derive patterns in the presentation and reporting of IC (Guthrie & Petty, 2000).…”