Does Intellectual Capital Information (ICI) Make Difference to Investors’ Decisions? A Field Study on Egyptian Investors

Abstract

This study aims to survey the literature and develop a more comprehensive intellectual capital disclosure index (ICDI). It also aims to identify whether intellectual capital information (ICI) have an influence on investors' investment decisions in the Egyptian context and if so, identify the most important ICI elements to their investment decisions. In order to achieve the research objective a field study is conducted on a sample of Egyptian investors (brokers, banks, insurance companies, and other financial institutions). A self-administered questionnaire is used to collect the study data from the sample. A total of 500 questionnaires were distributed to a random sample of Egyptian stock market investors, only 182 questionnaires were collected. Thus, the percentage of initial responses is 36.4% of the total number of the distributed questionnaires. After excluding incomplete and invalid questionnaires, the current study ended up with 177 valid and useable questionnaires-representing 35.4% response rate. The results of the study show that the majority of the respondents agree on the importance of ICI to investors' investment decisions. The finding also revealed that the ICI elements examined are not equal with regard to their influence on investment decisions. The findings of this study are not only important to improving investors' assessments of investment opportunities but also could be useful to regulatory authorities in Egypt for the improvement of disclosure practices by Egyptian companies and enhancing transparency in the capital market. Also, the ranking of IC elements by importance will help eliminate non relevant items from the proposed ICD index and thus reducing the costs associated with disclosing these elements.