The value relevance of voluntary intellectual capital disclosure: New Zealand evidence

Ellis, Henry; Seng, Dyna

doi:10.22495/cocv13i1c9p9

Cited by 14 publications

(11 citation statements)

References 44 publications

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“…Vafaei et al (2011) confirmed this result by analysing a sample of companies traded on the British, Australian, Hong Kong and Singapore stock markets. Similar results were obtained by Gamerschlag (2013) in Germany, as well as Ellis and Seng (2015) in New Zealand. Considering stocks listed on the ASX, Dumay and Tull (2007) observed that the diffusion of IC-related information in price-sensitive announcements had an impact on subsequent cumulative abnormal returns.…”

Section: Literature Reviewsupporting

confidence: 87%

“…As a productive factor, IC is fundamental in knowledge-based industries (Hansson, 1997; Ellis and Seng, 2015). Thus, the assumptions used to build this study’s equilibrium model are more likely to occur in the pharmaceutical industry, where IC plays a key role in successfully developing new drugs and obtaining approval from regulatory authorities (e.g.…”

Section: Introductionmentioning

confidence: 99%

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Strategic information disclosure, integrated reporting and the role of intellectual capital

Camodeca

Almici

Sagliaschi³

2019

JIC

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Purpose The purpose of this paper is to use a theoretical and empirical model to investigate the adoption of the integrated reporting (IR) framework as a strategic choice to signal intellectual capital (IC) to equity investors, with specific reference to the pharmaceutical industry. Design/methodology/approach The choice of drafting an integrated report is modelled as a means for managers to strategically disclose price-relevant information related to IC. The voluntary disclosure model developed by Verrecchia (1983) is used, also introducing the role of financial analysts to derive a directly reproducible empirical equation. Findings Theoretically, as IR requires managers to exert an effort in reporting activity, this work shows that in equilibrium, only firms with sufficient IC have decided to adopt IR, resulting in rational investors’ willingness to pay more only for the forecasted earnings of integrated reporters. This theory is tested in the pharmaceutical sector, where the modelling choice is probably more valid, with mixed results. Research limitations/implications When compliant with the International Integrated Reporting Council’s (IIRC) standards, IR provides the means to disclose IC in a perfectly verifiable way. Furthermore, since the IIRC has only recently been established, the conclusions have only been tested on a limited data set. Originality/value This work connects the value relevance of IR to IC by adopting an equilibrium approach, which, in turn, provides specific indications of how to build a consistent empirical test of the theory.

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Section: Literature Reviewsupporting

confidence: 87%

Section: Introductionmentioning

confidence: 99%

Strategic information disclosure, integrated reporting and the role of intellectual capital

Camodeca

Almici

Sagliaschi³

2019

JIC

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“…There are a number of empirical studies in different countries that focus on the relationship between IC information and market value. For example, in the USA (Abdolmohammadi, 2005), Britain, Australia, Hong Kong, Singapore (Vafaei et al , 2011), Sri Lanka (Abeysekera, 2011), Malaysia (Ousama et al , 2011b; Taliyang et al , 2014), German (Gamerschlag, 2013), New Zealand (Ellis and Seng, 2015), ASEAN countries (Nimtrakoon, 2015), Pakistan (Dashti et al , 2016) and Kuwait (Alfraih, 2017). These studies found a positive significant relationship between IC information and market value, consequently providing empirical evidence on the value relevance of IC information.…”

Section: Literature Reviewmentioning

confidence: 99%

The relationship between intellectual capital information and firms’ market value: a study from an emerging economy

Ousama

Al-Mutairi²,

Fatima

2019

MBE

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Purpose The purpose of this paper is to investigate the relationship between the intellectual capital (IC) information reported in the annual reports and market value of the companies listed on the Qatar Stock Exchange. Design/methodology/approach The study is based on a panel data collected from the annual reports and Bloomberg database for six years, specifically the periods 2010-2012 and 2016-2018. The total sample consists of 252 observations. The theoretical framework was developed in reference to the resource-based theory. The regression model is based on Ohlson’s model, which has been modified by including IC information. Findings The study found that there is a significant relationship between IC information and firm market value. This finding indicates that companies report their IC to help the stakeholders (e.g. shareholders, investors) to understand the real value of the company (which includes IC values). Practical implications The shift to a knowledge-based economy (KBE) has made knowledge a driver for economic growth, and it has become more important than capital, land and labour. This shift makes IC and resources vital for companies to create wealth, value and gain competitive advantage. The State of Qatar plans to transform its economy to a KBE in its “Qatar Vision 2030”. The findings of the study show that the companies have started to depend more on IC to contribute to transforming Qatar’s economy to a KBE. Originality/value This study could be considered a pioneer study to examine the association of IC disclosure and firm value in Qatar. Furthermore, prior literature has mixed findings, which justifies further investigation of IC’s effect on market value, particularly in the emerging economy of Qatar.

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“…Such studies deal with the intangible resources and their financial impact on the firm's value, trying to incorporate the qualitative view focused on intangibles strategy into a quantitative framework to measure the accounting value relevance. In some case studies, the value relevance of voluntary intellectual capital disclosure (rather than mandatory accounting) has been investigated by examining the impact on market value (Ellis & Seng, 2015).…”

Section: Theoretical Backgroundmentioning

confidence: 99%

In the Midst of Crisis: Knowledge Assets and Operating Efficiency of Italian Listed Companies

Taliento¹

2017

IJBM

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Firms' knowledge assets represent vital resources that contribute, in general, to corporate performance and value creation. At an earlier stage, they are expected to help enhance the operational efficiency of firms they belong to. In this light, under a Resource-Based Theory framework, we intend to find whether and to what extent this expectancy is verified also during the recent crisis in Italy. In more detail, we considered 612 firm-year observations relating to the Italian listed companies during three consecutive years -2010, 2011 and 2012 (when the financial crisis reached its peak in Italy) -analysing overall about 7.000 data/numbers under a Fixed Effects Panel Data Model. The findings are robust: we document a significant positive correlation between Operational Efficiency and Patent assets & Intellectual Property Rights, Goodwill, Trademarks & Licenses, while we do not find a correlation with reference to Research & Development Capital (and Advertising investments), also controlling for employees, leverage and time/sector dummies. In the midst of a very turbulent period, most intellectual assets (the former) appear from the efficiency point of view more valuable and reliable than others (the latter) in hampering the profitability drop. Hence, unlike the tangible and financial assets, such resources are prospected to be strategic levers that make it possible to maintain efficiency or to enable a faster recovery in terms of wasted efficiency. That is, in turbulent times, technology, marketing-related and contractual-legal assets appear significantly associated with operational efficiency and therefore beneficial to corporate results.

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The value relevance of voluntary intellectual capital disclosure: New Zealand evidence

Cited by 14 publications

References 44 publications

Strategic information disclosure, integrated reporting and the role of intellectual capital

Strategic information disclosure, integrated reporting and the role of intellectual capital

The relationship between intellectual capital information and firms’ market value: a study from an emerging economy

In the Midst of Crisis: Knowledge Assets and Operating Efficiency of Italian Listed Companies

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