The Relationship Between the Intellectual Capital Disclosure and Cost of Debt Capital – A Case of Slovenian Private Audited Organisations

Stropnik, Neca; Korošec, Bojana; Tominc, Polona

doi:10.1515/ngoe-2017-0019

Cited by 9 publications

(7 citation statements)

References 68 publications

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“…Other scholars have examined the relationship between intellectual capital disclosure and the cost of debt, obtaining conflicting results. Indeed, Orens et al (2009) found a negative association between intangible information and the cost of debt, while Stropnik et al (2017) found a non-significant relationship, thus suggesting that the amount of intellectual capital information disclosed by companies has no effect on the cost of debt.…”

Section: Integrated Reporting and Cost Of Debtmentioning

confidence: 95%

Integrated reporting quality and cost of debt financing

Caragnano

Mariani

Vitolla

2021

JAAR

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PurposeIn recent years, policymakers have increasingly pushed firms to disclose non-financial information. In Europe, integrated reporting (IR) is an increasingly adopted tool to fully comply with the requirements of the Directive 2014/95/EU. This study aims to examine the financial benefits of IR quality and specifically the effect on the cost of debt.Design/methodology/approachA manual content analysis is performed to measure the quality of the information contained in integrated reports. A panel regression model is used to test the effect of the IR quality on the cost of debt on a sample of 399 observations (a balanced panel of 133 European listed firms for the period 2017–2019).FindingsResults demonstrate a negative relationship between IR quality and the cost of debt, showing that firms that provide higher quality integrated reports benefit from access to third party financial resources at better conditions.Research limitations/implicationsThe results of this study offer important implications for managers and policymakers. The capacity of IR quality to allow a cost of debt reduction should push managers to a greater propensity towards transparency and the dissemination of high quality integrated reports. In addition, in light of the benefits connected to the IR quality, policymakers should push towards the adoption of IR as a solution to fulfil the regulatory obligations deriving from Directive 2014/95/EU.Practical implicationsResults show the goodness of IR as an ideal solution to fulfil the obligations imposed by Directive 2014/95/EU. The important financial benefits associated with IR quality make the high quality integrated report an ideal tool capable of fulfilling regulatory obligations and at the same time guaranteeing a reduction in the cost of debt.Originality/valueTo the best of the authors’ knowledge, this is the first work that analyses the relationship between IR quality and cost of debt.

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Section: Integrated Reporting and Cost Of Debtmentioning

confidence: 95%

Integrated reporting quality and cost of debt financing

Caragnano

Mariani

Vitolla

2021

JAAR

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“…In this regard, Orens et al (2009) have shown that there is a negative relationship between the amount of information relating to intellectual capital disclosed and the cost of debt. In contrast, Stropnik et al (2017) failed to find a significant relationship between intellectual capital disclosure and the cost of debt, conducting an analysis on a sample of Slovenian organizations.…”

Section: Literature Reviewmentioning

confidence: 98%

Extending the benefits of ESG disclosure: The effect on the cost of debt financing

Raimo

Caragnano

Zito

et al. 2021

Corp Soc Responsibility Env

251

129

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In recent years, greater attention has been paid to sustainability issues. Companies have received increasing pressure from stakeholders to adopt sustainable behavior and provide an adequate representation of sustainability practices. Nonfinancial disclosure has thus taken on a crucial role. In the academic field, several researchers have analyzed the effects of nonfinancial disclosure. However, limited attention has been paid to the impact of nonfinancial information on the cost of debt. This study aims at bridging this gap by analyzing the effect of ESG disclosure on the cost of debt. The fixed effects analysis conducted on a sample of 8264 observations (an unbalanced panel data of 919 firms for the period 2010-2019), shows a negative effect of the ESG disclosure on the cost of debt financing. The results demonstrate that companies with greater levels of transparency in the dissemination of ESG information benefit from accessing third party financial resources at better conditions.

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“…Finally, other studies have examined the relationship between intellectual capital disclosure and the cost of debt, with conflicting results. Orens et al (2009) highlights a negative relationship between information related to intangibles and the cost of debt, while Stropnik et al 's (2017) study using a sample of Slovenian firms fails to find any significant effect of intellectual capital disclosure on the cost of debt.…”

Section: Literature Reviewmentioning

confidence: 91%

The financial consequences of human capital disclosure as part of integrated reporting

Salvi

Petruzzella

Vitolla

2021

JIC

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PurposeThe purpose of this paper is to analyse the financial consequences of the level of human capital (HC) information disclosed by firms through integrated reports. Specifically, this work examines the effect of HC information on the cost of capital and firm value.Design/methodology/approachA manual content analysis is used to measure the level of HC information contained in integrated reports. A fixed-effects regression model is used to analyse 375 observations (a balanced panel of 125 firms for the period 2017–2019) and test the financial consequences of HC disclosure.FindingsThe empirical outcomes indicate that HC disclosure has a significant and negative effect on the cost of capital and a positive impact on firm value. Our results show that companies can reduce investors' perceived firm risk by improving HC disclosure, leading to a lower cost of capital. Moreover, our findings support the notion that increased levels of HC disclosure are linked to firms' improved access to external financial resources, consequently enhancing firm value.Originality/valueThis study is the first contribution to examine the financial consequences of HC disclosure and is one of the first to examine the level of HC information within integrated reports.

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The Relationship Between the Intellectual Capital Disclosure and Cost of Debt Capital – A Case of Slovenian Private Audited Organisations

Cited by 9 publications

References 68 publications

Integrated reporting quality and cost of debt financing

Integrated reporting quality and cost of debt financing

Extending the benefits of ESG disclosure: The effect on the cost of debt financing

The financial consequences of human capital disclosure as part of integrated reporting

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