Voluntary disclosure of intellectual capital in New Zealand annual reports and the “hidden value”

Abstract

Purpose -The paper's purpose is to describe the extent and type of voluntary disclosure of intellectual capital (IC) in New Zealand, and to test for a relationship between "hidden value" (difference between firm's market and book value), and its relationship to voluntary IC disclosure in the annual reports of New Zealand companies. The study aims to incorporate the effect of revaluations and growth expectations. Design/methodology/approach -Content analysis of 70 publicly listed New Zealand firms, and database retrieval of independent variable data. Correlation and regression analysis is undertaken. Findings -Only revaluing firms show a significant positive relationship between their levels of hidden value and their voluntary disclosure of IC and its components of external and internal structure. Explanatory power is increased when an interaction term involving hidden value and growth expectations is introduced. Research limitations/implications -Further developments in the growth expectation and market value measures are suggested. A need for qualitative interviews is identified in order to further develop theoretical explanation of the observed relationship. Practical implications -This paper may help external users assess levels of IC in revaluing firms. Originality/value -The study extends the work of Brennan by increasing the sample size, quantitatively recognising the impact of revaluations and growth expectations, providing a discussion of the theoretical underpinnings for the proposed relationships, and by utilising reliability testing in the content-analysis process, several measures of hidden value and IC disclosure, and statistical testing.

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

“…Accordingly, companies used HCD as an effective strategy of corporate disclosure to signal to stakeholders their responses, responsibilities, and values toward their human capital. In such a case, as suggested by stakeholder theory (Abeysekera 2006), the disclosure strategy may seem less effective through the traditional symbol of corporate success (e.g., through mandatory disclosure of financial and hard assets) (Guthrie & Ricceri 2004;Whiting & Miller 2008).…”

Corporate governance mechanisms and intellectual capital

“…Many previous studies have descriptively analyzed the amount of information supplied by companies in a given country, during a short period of time of one or two years (Abeysekera, 2010;Abeysekera & Guthrie, 2005;An, Davey, Eggleton, & Wang, 2015;Bozzolan et al, 2003;García-Meca et al, 2005;Goebel, 2015;Guthrie & Petty, 2000;Hidalgo et al, 2011;Li et al, 2008;Macagnan, 2009;Monclús et al, 2006;Oliveras et al, 2008;Tejedo-Romero & AlfaroCortés, 2014;Whiting & Miller, 2008;Yi & Davey, 2010).…”

“…Many of the aforementioned studies have tried to analyze the factors that influence IC disclosure, mainly companies' characteristics such as size, sector, market to book, indebtedness and profitability, among others (Alcaniz et al, 2015;Bozzolan et al, 2003;García-Meca et al, 2005;Goebel, 2015;Tejedo-Romero & Alfaro-Cortés, 2014;Whiting & Miller, 2008); as well as the CG mechanisms that affect IC disclosure (Abeysekera, 2010;Cerbioni & Parbonetti, 2007;Hidalgo et al, 2011;Li et al, 2008;Rodrigues et al, 2017).…”

“…The company sends signals to stakeholders about certain characteristics that are a source of competitive advantage in the market (Guthrie & Petty, 2000;Tejedo-Romero & Alfaro-Cortés, 2014) in order to reduce information asymmetries. IC disclosure can be an effective way for companies to signal their superior quality because of the relevance of IC to wealth generation (Vergauwen et al, 2007;Whiting & Miller, 2008). …”

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

“…Indeed, this disclosure may cause the dissatisfaction of creditors and increase the financing cost (Roberts, 1992 Miller and Whiting (2008) and Brennan (2001) confirmed the absence of association between the "hidden value", a similar measure to Tobin's Q, and voluntary intellectual capital disclosure. The reject of this hypothesis H4 leads us to suggest that SCD cannot be considered as a signaling mechanism.…”