Capital market pressures and the format of intellectual capital disclosure in intellectual capital intensive firms

Li, J and Mangena, M ORCID: https://orcid.org/0000-0002-3005-8110, 2014. Capital market pressures and the format of intellectual capital disclosure in intellectual capital intensive firms. Journal of Applied Accounting Research, 15 (3), pp. 339-354. ISSN 0967-5426

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Abstract

Purpose - A number of studies have examined firms’ intellectual capital (IC) disclosure practices. However, the presentation format of IC disclosure (text, numerical and graphs/pictures) is yet to be examined. In addition, there is little evidence on the impact of capital market pressures on IC disclosure. This study aims to examine the relation between presentation format of IC disclosures and three market factors (market-to-book ratio, share price volatility and multiple listing.
Design/methodology/approach - Using content analysis, we examine the level of IC disclosure provided in the annual reports of 100 IC-intensive listed UK firms. A 61-IC-item research instrument is used to measure IC disclosure and regression analysis is employed to examine the relation between disclosure and the market factors, controlling for corporate governance and firm specific variables.
Findings - Text is the most commonly used format for IC disclosure, whilst the use of graphs/pictures is very low. The findings of the relation between market factors and IC disclosure are mixed. Market-to-book ratio is significantly related to disclosure in text and numerical, but not to graphs/pictures. Share price volatility is only associated with graphs/pictures, whilst multiple listing is only related to text.

Originality/value - Our findings suggest that the impact of capital market pressures on IC disclosure might differ with presentation format. In this context, the study makes a significant contribution to the IC disclosure literature.

Item Type:	Journal article
Publication Title:	Journal of Applied Accounting Research
Creators:	Li, J. and Mangena, M.
Publisher:	Emerald Group Publishing
Place of Publication:	Bingley
Date:	2014
Volume:	15
Number:	3
ISSN:	0967-5426
Identifiers:	Number Type 10.1108/JAAR-12-2013-0117 DOI
Divisions:	Schools > Nottingham Business School
Record created by:	EPrints Services
Date Added:	09 Oct 2015 11:17
Last Modified:	09 Jun 2017 13:55
URI:	https://irep.ntu.ac.uk/id/eprint/25565

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