Is Share Ownership a Condition for the Voluntary Revelation of Human Capital?

2020 ◽  
Vol 7 (2) ◽  
pp. 21-36
Author(s):  
Ruth Leticia Hidalgo ◽  
Amada Hidalgo ◽  
Miguel Ángel Oropeza ◽  
Eleazar Villegas ◽  
Sofía Elizabeth Ávila
Keyword(s):  
Human Capital ◽  
Empirical Evidence ◽  
Intellectual Capital ◽  
Career Advancement ◽  
Training And Development ◽  
Annual Reports ◽  
Listed Firms ◽  
Quality Life ◽  
The Family

Previous studies affirm the importance of intellectual capital (IC) for organizations, since they acquire value and make them more competitive in the market. In this context, the empirical evidence shows that the key ingredient classification of IC is human capital (HC). The purpose of this study is to know what kind of Mexican companies listed are those that voluntarily disclose the HC, as to date there is no evidence of this information. That is why the authors consider a sample of 875 annual reports, corresponding to 85 Mexican listed firms during the period 2005-2015. These samples reveal that the largest companies in terms of number of employees, belonging to the construction and textile sectors, and shares are held by the family, and they are most likely to disclose aspects of HC. Thus, the authors determine that items occupying the top positions relate to the experiences as managers and employees as well as training and development, just as the information unless disclosed refers to the opportunity for career advancement and quality life at work.

Intellectual capital vs the book-value of assets

2014 ◽  
Vol 15 (1) ◽  
pp. 65-82 ◽  
Author(s):  
Sang Ho Kim ◽  
Dennis Taylor
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Value Relevance ◽  
Share Price ◽  
Annual Reports ◽  
Content Type ◽  
Book Value ◽  
Listed Firms ◽  
Structural Capital ◽  
Tangible Assets

Purpose – The purpose of this paper is to provide new evidence, made possible by human capital data that became available after IFRS adoption, on the productivity of intellectual capital and its components. These productivity measures are modelled to determine their value-relevance in the share market, and the modelling is extended to comparative productivity measures for the book-value of assets. Design/methodology/approach – Financial data are sourced from financial databases and company annual reports on a sample of 160 Australian listed firms over a five-year period. Panel regression analysis is used to test five models built from Riahi-Belkaoui's (1999) general price model of the value-relevance of accounting numbers. Findings – The results show that the productivity of human capital, structural capital and intellectual capital are each significantly positively related to share price (i.e. have value-relevance), whereas the productivity of total assets at book-value is non-significant and tangible assets is inversely significant. Originality/value – This study constructs a new improved method of computing the amount of structural capital, and uses recently available financial statement data to provide first-time evidence on human capital and its inclusion in the determination of the amount of intellectual capital. These new models and data enable a direct comparison to be made between the value-relevance of intellectual and the book-value of assets.

scholarly journals Proprietary costs of intellectual capital reporting: Malaysian evidence

2015 ◽  
Vol 23 (3) ◽  
pp. 275-292 ◽  
Author(s):  
Hasnah Kamardin ◽  
Robiah Abu Bakar ◽  
Rokiah Ishak
Keyword(s):  
Human Capital ◽  
Financial Reporting ◽  
Intellectual Capital ◽  
Stock Exchange ◽  
Value Added ◽  
Annual Reports ◽  
Content Type ◽  
Reporting Practices ◽  
Capital Efficiency

Purpose – The purpose of this paper is to examine the relationship between intellectual capital (IC) performance (value-added intellectual coefficient (VAIC)) and company characteristics with IC disclosure (ICD) in Malaysian listed companies. Design/methodology/approach – Sample of the study is 68 biggest Malaysian companies listed in Malaysian Stock Exchange based on market capitalization in year 2006. The paper follows the classification of ICD by Huang et al. (2007), with three broad IC categories in 45 items. Content analysis was used to collect the IC information from the annual reports. Regression analysis was conducted for VAIC and its components. Log linear analysis was also conducted to cater the possible misspecification in the model. Findings – Results of the study show that VAIC is negatively related to ICD. Further classification of VAIC shows that intellectual capital efficiency and human capital efficiency are negatively related to ICD whilst structural capital efficiency is not related to ICD. Company size and leverage are found to be positively related to ICD. Research limitations/implications – Negative association between VAIC and ICD suggests that companies reduce ICD for competitive advantage reason which supports the proprietary cost theory. The findings of the study may provide some evidence to regulators to enhance the reporting practices of IC for the benefits of users of financial reporting in making relevant decisions. The focus should be given on the reporting of human capital items. Originality/value – This is the first paper to use IC framework by Huang et al. (2007). Consistency of findings with other studies using different IC framework can be compared for the choice of IC framework in future studies.

The value relevance of intellectual capital disclosure: empirical evidence from Kuwait

2017 ◽  
Vol 25 (1) ◽  
pp. 22-38 ◽  
Author(s):  
Mishari M. Alfraih
Keyword(s):  
Empirical Evidence ◽  
Financial Reporting ◽  
Intellectual Capital ◽  
Value Relevance ◽  
Practical Implication ◽  
Listed Companies ◽  
Annual Reports ◽  
Equity Valuation ◽  
Content Type ◽  
Market Participants

Purpose Drawing on market efficiency theory and studies on intellectual capital (IC) disclosure, this study aims to examine if IC information provided in the corporate annual reports of Kuwait Stock Exchange (KSE) listed companies in 2013 is value-relevant. Design/methodology/approach The analysis is divided into two parts. First, the level of intellectual capital disclosure (ICD) of KSE-listed companies is examined using the content analysis method. Second, the value relevance of financial reporting is examined empirically using Ohlson’s (1995) valuation model. Findings The results reveal that ICD is positively and significantly associated with market value, suggesting that greater ICD is valued by KSE market participants, who incorporate it into their valuation models. Practical implications Given the importance of ICD in enhancing equity valuation, a practical implication of this study is to make managers aware of its positive and significant effect on equity valuation, which may encourage companies to increase their level of disclosure. Originality/value This is the first study of the association between the level of ICD and the value relevance of financial reporting for market participants in Kuwait. It therefore extends and confirms the prior literature by broadening its scope to include frontier markets. Furthermore, it provides empirical evidence in support of recent calls from regulators and professional bodies for information that supplements and complements traditional financial reporting.

scholarly journals Effectiveness of Social Enterprise in Managing Intellectual Capital

2019 ◽  
Vol 10 (3) ◽  
pp. 280
Author(s):  
Nur Hayati Binti Ab Samad ◽  
Noreena Md Yusoff ◽  
Rina Fadhilah Ismail
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Social Enterprise ◽  
Social Enterprises ◽  
Influential Factor ◽  
Annual Reports ◽  
Financial Viability ◽  
Relational Capital ◽  
Structural Capital ◽  
The Social

In order to successfully accomplish the social and business mission, social enterprises need to identify the appropriate elements of resources that affect their performance since the management of resources is important to ensure the effectiveness of social enterprise. Thus, this study aims to examine the role of intellectual capital, in terms of human capital, structural capital and relational capital on the effectiveness of social enterprise which is represented by the financial viability. Information on the financial viability and intellectual capital were obtained from the content analysis of the annual reports of 210 social enterprises registered under the Registry of Societies (ROS) in Malaysia for the financial period 2010. The results from the statistical analysis revealed that on average, most of the social enterprises in Malaysia would be able to financially sustain in the future. Based on the multivariate analysis, the results highlighted that human capital has a significant positive influence on the financial viability of social enterprise while structural capital and relational capital do not have significant positive relationship with the financial viability of social enterprise. Overall, the findings concluded that human capital was the most influential factor in enabling the effectiveness of social enterprise.

scholarly journals Empirical Linkage of Intellectual Capital and Performance of Islamic Banks

2019 ◽  
Vol 8 (5C) ◽  
pp. 677-684
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Positive Relationship ◽  
Value Added ◽  
Annual Reports ◽  
Bank Performance ◽  
Islamic Banks ◽  
Significant Positive Relationship ◽  
Banking Institutions ◽  
Capital Efficiency

With the eminence of the era of knowledge-based economies, the concept of intellectual capital (IC) is of vital importance for organisations to survive in these vigorous environments. As one of the knowledge intensive sectors, there is no exception to banking institutions in enhancing their intellectual capital efficiency to the forefront especially for Islamic banks (IBs) that have to compete with the firmlyestablished conventional banks. Accordingly, this study intends to measure the relationship between intellectual capital efficiency and banks’ performance. In total, 59 Islamic banks are selected and their audited annual reports are compiled from the banks’ websites respectively from year 2006-2017. Value-added intellectual coefficient (VAIC) are applied in measuring IC efficiency. The findings provide empirical evidences of positive relationship between IC efficiency and banks performance, nonetheless, when decomposes into human capital efficiency (HCE), structural capital efficiency (SCE) and capital employed efficiency (CEE), only human capital efficiency shows significant positive relationship with performance of the banks while the other two components show significant negative linkage with bank performance. Furthermore, due to criticisms towards VAIC method, this study using modified value-added intellectual capital coefficient (MVAIC) and found that MVAIC has significant positive relationship with bank performance while relational capital as additional variable in MVAIC regression model has no significant effect with bank performance. This study provides better insights on the importance of utilisation of IC by banking institutions particularly for Islamic banks.

scholarly journals Signalling external capital disclosure in annual reports

2014 ◽  
Vol 11 (4) ◽  
pp. 193-202 ◽  
Author(s):  
Indra Abeysekera
Keyword(s):  
Intellectual Capital ◽  
Voluntary Disclosure ◽  
Capital Accumulation ◽  
Annual Reports ◽  
Listed Firms ◽  
External Capital ◽  
Industry Sectors ◽  
Eleven Case

Much of the discussion of voluntary disclosure of external capital in annual reports entails only limited examination as signals for capital accumulation. Using the method of content analysis, this paper examines the signalling of external capital disclosure practices, the most disclosed category of intellectual capital, in annual reports of a sample of listed firms in Sri Lanka, a developing nation. Eleven case study interviews from the sample firms explore the role of signal for capital accumulation. Findings reveal that signals differ between industry sectors in convincing stakeholders to advance capital accumulation

scholarly journals ISLAMIC BANK AND SHARIA BUSINESS UNIT IN INDONESIA: A COMPARISON ON INTELLECTUAL CAPITAL DISCLOSURE PRATICES

2018 ◽  
Vol 8 (1) ◽  
pp. 1
Author(s):  
Ihyaul Ulum ◽  
Ismi’ Nor Amdini ◽  
Setu Setyawan ◽  
Nafsiah Mohamed
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Annual Reports ◽  
Relational Capital ◽  
Islamic Banks ◽  
Business Unit ◽  
Islamic Bank ◽  
Business Units ◽  
Structural Capital ◽  
Main Components

This study aims to compare the intellectual capital disclosures (ICD) in annual reports between Islamic Banks and Sharia Business Unit in 2015. Intellectual capital (ICD) is divided into three main components namely; Human capital, Structural capital and relational capital.  The components used in this study is the ICD-In framework written by Ulum (2015) which consists of 36 items of intellectual capital. This study uses purposive sampling to determine the sample of Islamic bank and Sharia business units registered in Bank Indonesia in 2015, with a sample of 34 banks. The results indicate that there was a difference practices on intellectual capital disclosures of Islamic banks and Sharia business unit. Islamic banks disclosed on IC higher than Sharia business unit.

Voluntary disclosure of intellectual capital information by deposit money banks in Nigeria

2020 ◽  
Vol 21 (6) ◽  
pp. 1035-1052
Author(s):  
Nnachi Egwu Onuoha ◽  
Grace Nyereugwu Ofoegbu ◽  
Regina Gwamniru Okafor ◽  
Vincent Aghaegbunam Onodugo
Keyword(s):  
Human Capital ◽  
Intellectual Capital ◽  
Voluntary Disclosure ◽  
Annual Reports ◽  
Empirical Literature ◽  
Rank Test ◽  
Relational Capital ◽  
Content Type ◽  
Significant Difference

PurposeThe purpose of this paper is to investigate the extent and quality of voluntary intellectual capital disclosure (ICD) by deposit money banks (DMBs) in Nigeria.Design/methodology/approachData were collected from a survey of 271 informants and content analysis of the annual reports of 12 DMBs in Nigeria. The data collected were analysed using factor analysis, t-test, Friedman test for related sample and Wilcoxon signed-rank test.FindingsThe findings of this paper indicate that the extent of ICD is significant and higher than the quality of ICD, which is insignificant, with the extent of disclosure highest in the relational component of intellectual capital. It also shows that a significant difference exists amongst the extent of human capital, structural capital and relational capital disclosures, with the significant difference traced to the difference between the extent of disclosures of relational capital and human capital.Research limitations/implicationsThe results can be interpreted across the target sample where the study covers a five-year period and 12 DMBs in Nigeria. However, the study provides a robust empirical basis for policymakers and regulators to develop future ICD regulatory guidelines for banks and push for improvement in the quality of ICD by DMBs.Originality/valueNo previous studies of voluntary ICD have considered the extent and quality of ICD by DMBs in Nigeria. Further, this study shed the light on a new human capital item related to “employee health and mental state”; therefore, it extends and supports the previous empirical literature on ICD.

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