The nature and extent of voluntary intellectual capital disclosures by Australian and UK biotechnology companies

Abstract

Purpose -The purpose of this research project is to compare the nature and extent of voluntary intellectual capital disclosures (ICD) by UK and Australian biotechnology companies. The motivating research question was whether the nature and extent of voluntary ICD by preparers of financial report data in these countries reflected the relative maturity of the UK, compared to Australian industry. Design/methodology/approach -ICD was measured in annual reports and financial statements published on the company websites. A Danish disclosure index was used to evaluate voluntary disclosures by 156 companies about customers, employees, IT, strategy, R&D and processes (78-items scored for each company). Findings -A significant leverage effect was demonstrated in relation to the "nature" of ICD by UK and Australian biotechnology companies. Interestingly, mean customer ICD were higher in annual reports from high-leveraged compared to low-leveraged Australian firms. In contrast, UK firms showed higher mean R&D ICD for low-leveraged firms than high-leveraged firms. With regards to the "extent" of ICD measured, the study demonstrated a significant country effect. Research limitations/implications -Potential limitations or bias may exist from the use of the disclosure index: binary scoring of disclosure versus non-disclosure reduces the richness of data otherwise obtainable by limited case study or interviews; and data collection is limiting -narrative with managers actually preparing ICD is not possible. Practical implications -Australian company financial accountants and managers preparing and/or including ICD information could be in danger of underestimating the importance of information asymmetry existing with lenders. Originality/value -This finding contrasts the legitimate R&D focused ICD of low-leveraged UK firms; namely to attract stakeholder attention to their expanding intellectual property base, with the findings from Australian firms' with a relatively predictable and naïve customer focus.

The Role of Firm Characteristics in Voluntary Disclosure of IC Information and Its Importance for High-Tech Companies

“…It has been structured based on the frameworks of previous studies and contains 25 items. Numerous researchers had used frameworks compiled and tested by Sveiby [57] and Guthrie and Petty [58] with slight modifications ( [29], [30], [46], [47], [50], [52], [55] [59] - [61]). The same approach has been applied in this research.…”

Underwriter Reputation, Intellectual Capital Disclosure, and Underpricing

“…Studies on the determinants of IC disclosure in annual financial statements have been frequently conducted by researchers both in developed countries (Guthrie and Petty, 2000;Brennan, 2001;Bozzolan et al,2003;Guthrie et al, 2006;White et al, 2007;Vergauwen et al, 2007;Cerbioni and Parbonetti, 2007;Bruggen et al, 2009;White et al, 2010;Hidalgo et al, 2011;Ferreira et al, 2012;Liao et al, 2013) or developing countries (Purnomosidhi, 2006;Sihotang and Winata, 2008;Joshi et al, 2011;Taliyang et al, 2011;Yi et al, 2011). However, the studies on the determinants of IC in Initial Public offering (IPO) setting are few, especially in developing country such as Indonesia.…”

Perceptions of Chinese Stakeholders on the Disclosure Importance of Intellectual Capital Attributes: A Note

“…Abeysekera & Guthrie, 2005;Oliveira et al, 2006;Li et al, 2008;White et al, 2010;Rashid et al, 2012). Differing from the prior research, our paper examines the perceptions of Chinese stakeholders on the disclosure importance of the most significant IC attributes, using a questionnaire survey into a panel of Chinese stakeholders.…”