The explanatory factors of intellectual capital disclosure to financial analysts

García‐Meca, Emma; Parra, Isabel; Jorge, Manuel Larrán; Martínez, Isabel

doi:10.1080/0963818042000279713

Cited by 201 publications

(228 citation statements)

References 45 publications

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“…Previous literature has examined the separate effects of resource attribute on intangible asset disclosure (Archambault & Archambault, 2003;Citron, Holden, Selim, & Oehlcke, 2005), the role of such disclosures as signals (Bozzolan, Favotto, & Ricceri, 2003;Garcia-Meca, Parra, Martinez, & Larran, 2005) and the role of governance factors such as board composition on disclosure (Haniffa & Cooke, 2002;Lufti, 1989, Malone, Fries, & Jones, 1993. Taken together the results of these and other studies suggest that investment in intangible resource and their disclosure through transparent governance structures are potential mechanisms to secure competitive advantage and its corollary of superior returns to shareholders.…”

Section: Intangible Assets -A Key Source Of Competitive Advantagesupporting

confidence: 59%

Firm Resources, Corporate Governance and the Disclosure of Intangible Assets

Mkumbuzi¹

2015

ASS

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The paper investigates the determinants of intangible asset disclosure with reference to the interaction of heterogeneous asset and governance characteristics of firms. Specifically, it considers R&D intensity as a measure of asset heterogeneity and multiple proxies for the effectiveness of the firm's corporate governance mechanisms and structures of accountability. Intellectual capital attributes are applied as the measure of disclosure quality and as the signalling mechanism through which management are able to inform markets of their competitive advantage. By applying the resource based view of the firm and signalling theory, the paper extends prior research on the determinants of intangibles disclosure through an analytical framework that examines the interaction of firm resources, corporate governance and intangibles disclosure. The theoretical framework combines the RBV of the firm in confirming intangibles as a necessary feature of disclosing firms' asset base and signalling as the means with which management disclose their competitive advantage. The results of the analysis indicate a positive relationship between R&D intensity, complexity and scope of activity and the presence of quality signalling responses. Also, the separation of the roles of chair and non-executive director, complemented by experienced non-executive directors promote quality signalling through the disclosure of intellectual capital attributes. These findings support the view that corporate governance mechanisms are only effective when applied in combination. Governance mechanisms bring about transparency and accountability through disclosure of these intangibles despite the potential competitive losses. The lack of proprietary costs that might otherwise restrict disclosure might be attributed to competitors' inability to imitate such intellectual capital resources and therefore their inability to duplicate such signals. The findings confirm the interaction between heterogeneous assets and governance mechanisms in the disclosure of intangibles as signalling mechanisms for management.

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Section: Intangible Assets -A Key Source Of Competitive Advantagesupporting

confidence: 59%

Firm Resources, Corporate Governance and the Disclosure of Intangible Assets

Mkumbuzi¹

2015

ASS

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“…This corroborates the results of Guthrie et al (2006) and Wong and Gardner (2005), concerning ICD, in Australia and New Zealand and it is inconsistent with the conclusions of Williams (2001), Woodcock andWhiting (2009), Oliveira et al (2006) and Garcia-Meca et al (2005). Li et al (2008) confirm that these inconclusive findings "could be due to the lack of representativeness in sampling at sector level".…”

Section: Discussioncontrasting

confidence: 44%

“…Some studies have indicated that companies, in Spain and Singapore, disclosure more intellectual capital information to signal to the market their real value and growth potential (Garcia-Meca et al, 2005;Williams & Firer, 2003), while other studies have showed no relationship at all (Williams, 2001). …”

Section: Voluntary Scd According Shareholder's Approach: the Argumentmentioning

confidence: 99%

An Analysis of the Determinants of Voluntary Structural Capital Disclosure by Listed French Companies

Kateb¹

2012

IJBM

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This paper analyzes the characteristics of voluntary structural capital disclosure and points out the factors explaining the disclosure of such information, based on a sample of French companies belonging to the SBF 120 and observed in 2006.Using manual content analysis, the study shows that firms provide more information on innovation capital with emphasizing on the narrative and descriptive forms. The results confirm that ownership structure, size, debts and the weight of activated goodwill are the determinants of voluntary structural capital disclosure. However variables apprehending the legitimacy's level of the firm and the interest in its stakeholders' pressure seem to be not significant in explaining the level of this disclosure. Accordingly, the structural capital communication strategy does not meet the needs of legitimization that fit into a vision of corporate citizenship, but in order to mitigate some agency costs and solve the inadequacy of financial reporting.

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“…A plethora of ICD studies have been conducted in many parts of the world examining disclosure of HC in company annual reports (Abeysekera & Guthrie, 2005;April, Bosma & Deglon, 2003;Arvidsson, 2003;Bergamini & Zambon, 2002;Bozzolan, Favotto & Ricceri, 2003;Brennan, 2001;Carnaghan, 1999;Firer & Williams, 2005;Flöstrand & Ström, 2006;Goh & Lim, 2004;Guthrie, Petty, Ferrier & Wells, 1999;Olsson, 2001;Petty & Cuganesan, 2005;Vandemaele, Vergauwen & Smits, 2005;Williams, 2001), IPO prospectuses (Bukh, Nielsen, Gormsen & Mouritsen, 2005;Nielsen et al, 2005), presentations to analysts García-Meca, Parra, Larrán & Martínez, 2005) and sell-side analysts reports (Arvidsson, 2003;Flöstrand, 2006;Flöstrand & Ström, 2006;García-Meca, 2005;Nielsen, 2004). In addition to HCD studies (Hedlin & Adolphson, 2000;Olsson, 2004;Subbarao & Zeghal, 1997), research on ICD in company annual reports and IPO prospectuses have evaluated the level of emphasis placed on HC disclosures by preparers of financial statements.…”

Section: Introductionmentioning

confidence: 99%

An Explanation of Human Capital Disclosure from the Resource Based Perspective

Abhayawansa

Abeysekera

2008

SSRN Journal

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Though the importance of human capital (HC) in firm value creation is firmly established in the literature the level of emphasis placed on human capital disclosure (HCD) by preparers of financial statements and sell-side analysts is minimal. The purpose of this paper is to address this dilemma by critically analysing the conceptualisation of human capital in disclosure literature and introduce a more germane explanation. Keywords AbstractPurpose -Though the importance of human capital (HC) in firm value creation is firmly established in the literature the level of emphasis placed on human capital disclosure (HCD) by preparers of financial statements and sell-side analysts is minimal. The purpose of this paper is to address this dilemma by critically analysing the conceptualisation of human capital in disclosure literature and introduce a more germane explanation.Design/Methodology/approach -The paper begins by reviewing the literature on intellectual capital disclosure (ICD) to examine the level of HC disclosure in various company media and use of such information by the capital market. It then critically analyse the conceptualisation of HC in those studies with a view to form an opinion about the adequacy of that conceptualisation. Then resource based view is justified as providing a more appropriate conceptualisation of HC to meet demands of the capital market.Findings -Substantial ICD literature conceptualise HC using human capital theory as a collection of knowledge and competences possessed by employees individually and collectively in firms. This has resulted in HC disclosure scores being considerably low compared to external and internal capital disclosure and does not portray HC in a way that is useful to the capital market. Resource based perspective enable HC to be depicted in a way that closely resembles the value creation potential of firms' employees.Practical implications -Guidance is provided for future HCD and ICD studies to operationalise HC to reflect its value creation potential by encompassing not only the firm specific stock of knowledge and capabilities of employees but also the strategic human resource management practices, enabling corporate culture and the idiosyncratic systems and practices of the firm in place to reap the benefits of these.

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The explanatory factors of intellectual capital disclosure to financial analysts

Cited by 201 publications

References 45 publications

Firm Resources, Corporate Governance and the Disclosure of Intangible Assets

Firm Resources, Corporate Governance and the Disclosure of Intangible Assets

An Analysis of the Determinants of Voluntary Structural Capital Disclosure by Listed French Companies

An Explanation of Human Capital Disclosure from the Resource Based Perspective

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