Ownership composition and intellectual capital disclosure: Indonesia as a case study

Abstract

This study explores whether ownership structure (comprising ownership concentration, foreign, managerial, and institutional ownership) affects intellectual capital disclosure (ICD) in Southeast Asia’s largest stock market and Indonesia’s emerging economy. The sample includes 323 public firms listed on the Indonesia Stock Exchange (IDX) from seven industries between 2008 and 2017, or 2,634 firm-year observations. Data were analyzed using the ordinary least squares (OLS) regression with robust standard errors. The results show that ICD is positively related to ownership concentration. A negative and substantial relationship was found for both foreign and managerial ownerships, while the institutional ownership variable had a negative and insignificant impact. Overall, the results show robust conclusions regarding the impact of the ownership structure on ICD. The findings of this investigation could be taken into account by capital market authorities such as the Indonesia Stock Exchange (IDX) to raise awareness of intellectual capital and improve ICD practices. Acknowledgment The researchers are grateful for the valuable responses from two unnamed reviewers and discussion respondents at Mulawarman University. We also thank the Indonesia Stock Exchanges (IDX) and The Indonesia Capital Market Institute for providing the annual report.

Impact of Board Diversity on Voluntary Disclosure of Intellectual Capital: Evidence from Listed Non-Financial Services Firms in Nigeria

“…Hypothesis one predicts that board nationality does not have a significant impact on ICD; however, based on the finding of the study, we, therefore, reject the null hypothesis. The finding concurs with those of Rasmini et al (2014) and Othman et al (2018), but contradicts that of Ulfah et al (2021).…”

“…The multiple regression results revealed that the presence of foreign directors on the board had a significant impact on the extent of innovation capital disclosure. However, using data from annual reports of 323 Southeast Asia's largest stock market and Indonesia's emerging economy during the period 2008 to 2017, Ulfah et al (2021) found that foreign ownership had a negative and significant impact on ICD of Indonesian firms. In view of the foregoing, the following hypothesis is formulated:…”

The Impact of Board Structure on Voluntary Environmental and Energy Disclosure in an Emerging Market

“…According to Krippendorff (1980), content analysis derives reproducible and accurate conclusions from data based on their context. This approach is widely acknowledged as impartial and dependable and is mostly employed to investigate intellectual and human capital disclosure (Ulfah et al, 2021;Kusumawardani et al, 2021a). Furthermore, Larran Jorge et al ( 2016) stated that content analysis reduces questionnaire and interview deficiencies (Larran Jorge et al, 2016).…”

Quality of audit committee as a moderating effect between shareholding structure and intellectual capital disclosure in Indonesian banking companies

“…As a result, outside shareholders do not need additional monitoring of manager behavior. Several studies have proven the negative influence of management's share ownership on intellectual capital disclosure (Ahmed Haji, 2015;Al-Sartawi, 2018;Haji & Ghazali, 2013;Rahman, Sobhan, & Islam, 2019;Ulfah, Yudaruddin, & Yudaruddin, 2021). Meanwhile, an investigation conducted by Hidalgo, García-Meca, and Martínez (2011); Juhmani (2013), andAlfraih (2018) showed that there is no relationship between management shareholding and disclosure of intellectual capital.…”

“…Institutional ownership promotes management to disclose intellectual capital as widely as possible. The high number of shares owned by the institution will result in higher disclosure of intellectual capital (Juhmani, 2013;Mukti & Istianingsih, 2018;Ulfah et al, 2021). However, the results do not always match this logic, as shown by Rahman et al (2019) who reported that more institutional share ownership would reduce the quantity of intellectual capital disclosed.…”