An empirical examination of the value relevance of intellectual capital using the Ohlson (1995) valuation model

Swartz, G; Swartz, N‐P.; Firer, Steven

doi:10.1108/10222529200600013

Cited by 32 publications

(34 citation statements)

References 38 publications

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“…Reporting of non-financial information has been found to be valuerelevant, reducing the cost of equity capital and improving analyst forecast accuracy (de Villiers and Marques, 2016;Dhaliwal et al, 2011;Dhaliwal et al, 2012). Although IC itself has been found to have a positive impact on market value and financial performance (Abdolmohammadi, 2005;Chen et al, 2005;Swartz et al, 2006), IC disclosures have also been found to be of a low quality, often providing qualitative rather than quantitative information (Guthrie, Petty, Ricceri, 2006). If voluntary disclosure is positively correlated with performance and market value, and negatively correlated with cost of capital, the question may be asked why companies do not disclose more IC information.…”

Section: Literature Reviewmentioning

confidence: 99%

The influence of integrated reporting and internationalisation on intellectual capital disclosures

Terblanche

Villiers

2019

JIC

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Purpose The purpose of this paper is to examine whether preparing an integrated report and/or whether cross-listing is associated with more intellectual capital (IC) disclosure. Design/methodology/approach The paper compares the content of IC disclosures of matched samples of companies. Findings The findings show that companies preparing an integrated report disclose more IC information, and that companies exposed to international capital market pressures through cross-listing do not disclose more IC information. Research limitations/implications The findings imply that integrated reporting (IR) is likely to increase IC disclosures and also that future IC disclosure research may have to take into account whether companies prepare an integrated report. Practical implications The results will be of interest to the proponents of IC and of IR, including the developers of the IR framework, regulators and companies considering IR. Originality/value This is one of the first studies to assess the influence of preparing an integrated report on the level of IC disclosure.

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Section: Literature Reviewmentioning

confidence: 99%

The influence of integrated reporting and internationalisation on intellectual capital disclosures

Terblanche

Villiers

2019

JIC

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“…IR clearly implicates the delivery of a comprehensive picture of firms' value creation process, by joining information about various types of capitals (manufactured, financial, natural, intellectual, human, social and relationship,) in one integrated report (IIRC, 2013). Investors are involved in any information that can support them in making investment choices (Swartz et al, 2006) and in this regard the communication of how firms cope both their IC (human, structural and relational) and non-IC (manufactured, financial, natural) capitals represents a key starting point for investors' analyses (Gamerschlag, 2013). IIRC supplements traditional financial statements with additional IC information to support firms in holistically portraying value creation with an emphasis on IC.…”

Section: The Relationship Between Fl_ici and Irmentioning

confidence: 99%

Forward-Looking Intellectual Capital Information in Integrated Reporting: An Empirical Analysis

Menicucci¹,

Paolucci²

2019

IJBM

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The aim of the paper is to explore the amount of forward-looking intellectual capital information (FL_ICI) in Integrated Reporting (IR) and the effect of firm characteristics on FL_ICI within this context. This study empirically bridges the research gap on the issues of forward-looking information (FLI) and adds to intellectual capital (IC) disclosure research. In particular, the paper responses to two research questions specifically: what are the extent and the content of FL_ICI and what are the factors that impact on different IC voluntary reporting behaviors in IR. A content analysis is apply to inspect the subjects and the amount of FL_ICI in reports accessible in the web site of the International Integrated Reporting Council. Five Models are verified using a multivariate regression analysis to investigate the influence of three independent variables (firm size, profitability and leverage) on FL_ICI. The research proves that companies are reluctant to disclose FL_ICI in integrated reports. The findings of the research show that the majority of FL_ICI regards relational capital. The regression model also reveals that firm size and profitability have a statistically significant influence on specific topics of FL_ICI. On the contrary, leverage appears insignificant in determining the amount of FL_ICI. The research contributes to prior disclosure literature regarding forward-looking information since prior research results are unclear. There is a limited number of studies that investigated FL_ICI in relation to firm characteristics and no studies have investigated this issue within the setting of IR.Standard Setters have promoted amended financial reporting in this respect. For example, the Jenkins report (Jenkins, 1994) proposed a wide variety of information types (including FLI) of voluntary disclosures based on the information needs to make investment decisions.

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“…However, the empirical research review using the Ohlson model in 1996-2016 showed a variety of proxy for the abnormal earnings measurement. Proxies for such measurements include; earnings before extraordinary items and discontinuous operations (Barth, Beaver & Landsman, 1999;Bauman, 1999;Belkaoui & Picur, 1999 Swartz & Firer, 2006). Differences were also found in the assumption use of the cost of equity capital (r) at 12% and 8%.…”

Section: Literature Reviewmentioning

confidence: 99%

The Value Relevance of Earning Measurement Using Ohlson Model: A Meta-Analysis

Karyadi

Subroto

Rahman

et al. 2019

IJABS

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The purpose of this study is to integrate the value relevance of several earning measurement from prior studies using the Ohlson model. Previous findings consistently show that the earnings on extraordinary items has a positively significant relationships with the equity market value weather, with or without the use of a scale while mixed results has been reported for abnormal earning, earning per share and net income in different country between 1996-2016. Findings also revealed that the value in the relevance level (R 2 ) varies and have different relationships in the equity market value for the same earning measurement. Researchers used a meta-analysis from the 257 published studies to summaries the findings with a standard statistics in the form of effect sizes. The analysis also allows researchers test the positive relevance without using a regression analysis, to determine the single level of R 2 using the shared variance proportion (r 2 ) value. The findings specifically confirms that the EPS, abnormal earning per share, earning before extraordinary item per share and the net income have positive relevance. Compared to the quarterly and six month price after the end of the year, the value of the EPS relevance level has a higher if associated with share price at the end of the year. This also happens in an abnormal earning per share with an equity cost capital 8%. The EBEI has a higher r 2 compared to the quarterly share price and the net income with equity market value. The research findings also revealed that the positive relevance of the net income is influenced by a moderating variable.

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An empirical examination of the value relevance of intellectual capital using the Ohlson (1995) valuation model

Cited by 32 publications

References 38 publications

The influence of integrated reporting and internationalisation on intellectual capital disclosures

The influence of integrated reporting and internationalisation on intellectual capital disclosures

Forward-Looking Intellectual Capital Information in Integrated Reporting: An Empirical Analysis

The Value Relevance of Earning Measurement Using Ohlson Model: A Meta-Analysis

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