Journal of Human Resource Costing & Accounting

Effects of intellectual capital information disclosed in annual reports on market

capitalization: Evidence from Bursa Malaysia
Ousama Abdulrahman Anam Abdul Hamid Fatima Abdul Rashid Hafiz Majdi

Downloaded by FREIE UNIVERSITAT BERLIN At 05:44 13 May 2015 (PT)

Article information:
To cite this document:
Ousama Abdulrahman Anam Abdul Hamid Fatima Abdul Rashid Hafiz Majdi, (2011),"Effects of intellectual
capital information disclosed in annual reports on market capitalization", Journal of Human Resource
Costing & Accounting, Vol. 15 Iss 2 pp. 85 - 101
Permanent link to this document:
http://dx.doi.org/10.1108/14013381111157328
Downloaded on: 13 May 2015, At: 05:44 (PT)
References: this document contains references to 56 other documents.
To copy this document: permissions@emeraldinsight.com
The fulltext of this document has been downloaded 1295 times since 2011*

Users who downloaded this article also downloaded:

Mohammad J. Abdolmohammadi, (2005),"Intellectual capital disclosure and market capitalization", Journal
of Intellectual Capital, Vol. 6 Iss 3 pp. 397-416 http://dx.doi.org/10.1108/14691930510611139
Abdulrahman Anam Ousama, Abdul-Hamid Fatima, Abdul Rashid Hafiz-Majdi, (2012),"Determinants of
intellectual capital reporting: Evidence from annual reports of Malaysian listed companies", Journal of
Accounting in Emerging Economies, Vol. 2 Iss 2 pp. 119-139 http://dx.doi.org/10.1108/20421161211229808
Abdifatah Ahmed Haji, Nazli A. Mohd Ghazali, (2012),"Intellectual capital disclosure trends:
some Malaysian evidence", Journal of Intellectual Capital, Vol. 13 Iss 3 pp. 377-397 http://
dx.doi.org/10.1108/14691931211248927

Access to this document was granted through an Emerald subscription provided by 514603 []

For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald for
Authors service information about how to choose which publication to write for and submission guidelines
are available for all. Please visit www.emeraldinsight.com/authors for more information.

About Emerald www.emeraldinsight.com

Emerald is a global publisher linking research and practice to the benefit of society. The company
manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as
providing an extensive range of online products and additional customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee
on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive
preservation.
*Related content and download information correct at time of download.

The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1401-338X.htm

Effects of intellectual capital

information disclosed in annual
reports on market capitalization
Evidence from Bursa Malaysia

Effects of IC
information

85

Ousama Abdulrahman Anam

Downloaded by FREIE UNIVERSITAT BERLIN At 05:44 13 May 2015 (PT)

Multimedia University, Cyberjaya, Malaysia, and

Abdul Hamid Fatima and Abdul Rashid Hafiz Majdi

International Islamic University Malaysia, Kuala Lumpur, Malaysia
Abstract
Purpose This paper aims to examine the effects of intellectual capital (IC) disclosure in the annual
reports of listed companies in Bursa Malaysia (BM) on their market capitalization (MCAP).
Design/methodology/approach The paper uses secondary data for listed companies on BM for
the years 2002 and 2006. A disclosure index was used to measure the extent of IC information
disclosed in the annual reports. The MCAP data were obtained from the Bloomberg database. The
data were analyzed using correlation and regression analyses.
Findings The paper finds that the extent of IC disclosure by Malaysian-listed companies has a
positive significant effect on their MCAP. In addition, the paper found that there is significant positive
impact of the control variables (i.e. book value, net profit, firm size and leverage) on the MCAP.
Research limitations/implications Although the paper was focused on the IC information and
MCAP data for two years (i.e. 2002 and 2006), it provides empirical evidence that IC disclosure does
affect the MCAP of companies. Hence, it means that the IC information is picked up by the market.
Future research may incorporate more control variables and years.
Practical implications The findings provide empirical evidence that IC information disclosed by
the Malaysian-listed companies positively affects their MCAP. These findings can be considered to be
useful for these companies and work as a signal towards the need for more IC disclosure. In addition,
the findings could be useful for the regulatory bodies, e.g. the Malaysian Accounting Standards Board
and BM, perhaps to develop guidelines on IC disclosure to enhance transparency and increase
confidence in the capital market.
Originality/value The paper is considered the first empirical study to examine the effects of IC
disclosure in the annual reports of Malaysian-listed companies on their MCAP.
Keywords Intellectual capital, Effects, Disclosure, Market capitalization, Bursa Malaysia
Paper type Research paper

1. Introduction
In the knowledge-based economy or knowledge economy (KE), the main economic
resources are no longer physical capital, natural resources and labor, but knowledge
itself (Drucker, 1992). Thus, a KE is an economy in which the generation, application and
exploitation of knowledge play an important role as the driving forces of economic
The authors gratefully acknowledge the many constructive and insightful comments received
from the reviewers.

Journal of Human Resource Costing &

Accounting
Vol. 15 No. 2, 2011
pp. 85-101
q Emerald Group Publishing Limited
1401-338X
DOI 10.1108/14013381111157328

JHRCA
15,2

Downloaded by FREIE UNIVERSITAT BERLIN At 05:44 13 May 2015 (PT)

86

growth (Leadbeater, 1999; Goh, 2005). Knowledge Economy companies tend to create
value based on intangible capital and resources rather than tangible ones (Abeysekera,
2006; Whiting and Miller, 2008). Consequently, this has resulted in hidden capital, which
is the difference between the market and book values of the companies. This hidden
capital is recognized and valued by the market (Al-Ali, 2003; Ordonez de Pablos, 2003).
Broadly speaking, this hidden capital can be called intellectual capital (IC) (Stewart,
2000; Brennan, 2001). Therefore, there is increasing recognition of the role of IC in
driving the market value of the company (Chen et al., 2005).
IC can be defined from the perspective of wealth creation as intangible resources and
assets that an organization can use to create value by converting it into new processes,
products, and services (Al-Ali, 2003, p. 5). Similarly, Stewart (2000, p. xi) defines IC as
intellectual material knowledge, information, intellectual property, experience that
can be put to use to create wealth. IC is usually classified into three main categories,
based on one of the most popular classifications by Sveiby (1997), who classifies IC as
internal structure, external structure and employee competence. This classification of IC
by Sveiby (1997), is often referred to and adopted by the IC literature (April et al., 2003;
Abeysekera and Guthrie, 2005; Wong and Gardner, 2005; Whiting and Miller, 2008),
with slight modification of the terminology of the categories into internal capital (INC),
external capital (EXC) and human capital (HUC). INC refers to the IC inside the company
which consists of innovations, technological infrastructure, internally generated
intangible assets (e.g. patents, brand names and trademarks), quality, processes and
management philosophy (Sanchez et al., 2000; Guthrie and Petty, 2000; Bontis, 2003;
Seetharaman et al., 2004). On the other hand, EXC refers to the IC that exists outside of
the company, which includes business partnering and alliances, business combination,
information about customers (e.g. information about the customers number or market
share), customers satisfaction, suppliers (e.g. information about suppliers), distribution
channels, marketing, market value and share price, and shareholders (Sanchez et al.,
2000; Brennan, 2001; Bontis, 2003; Seetharaman et al., 2004; Olsson, 2004). Finally, HUC
refers to the human resources of the company which include employees education,
skills, training, values and experience (Sanchez et al., 2000; Guthrie and Petty, 2000;
Bontis, 2003; Seetharaman et al., 2004).
There are some prior empirical studies in developed economies that examine the
impact of the extent of disclosure in general (e.g. voluntary, mandatory, both) on the
market value of the companies (Botosan, 1997; Lang and Lundholm, 2000), and which
report a significant relationship. On the other hand, in emerging economies some
empirical studies (Ragab and Omran, 2006) show the effect of general disclosure on
market valuation. This indicates that when the information is useful, it is valued by the
market (Hassan et al., 2011). Looking at the disclosure of IC, there are a limited number of
studies that specifically examine the relationship between IC disclosure and market
value (as will be discussed in the literature review section). Nevertheless, these studies
found that there is a positive significant relationship between the two. However,
in Malaysia, as an emerging economy, so far, there are no studies that examine the effect
of IC disclosure in the annual reports of listed companies on their market value.
Therefore, this research is motivated by the fact that such a study is warranted since IC
(i.e. hidden value) may or may not be captured by the market in emerging economies like
Malaysia, which may be subjected to market imperfections.

Downloaded by FREIE UNIVERSITAT BERLIN At 05:44 13 May 2015 (PT)

Based on the need to discover whether a relationship exists, the main objective of
this paper is to examine the effects of IC information disclosed in the annual reports of
listed companies on Bursa Malaysia (BM)[1] on their market capitalization (MCAP)[2].
The paper makes several contributions. First, it contributes towards the IC literature in
Malaysia, especially on the issue of the effects of IC information on the market value of
the company. Second, since it was found that IC disclosure does affect MCAP, the
paper contributes towards practice by highlighting the importance of IC disclosure to
the Malaysian-listed companies as this affects their MCAP. Thus, the findings should
motivate these companies to disclose more IC information. Third, the paper contributes
to the policy making by providing empirical evidence on the effects of IC disclosure on
listed companies MCAP to the regulatory bodies (e.g. Malaysian Accounting Standard
Board (MASB); BM). Thus, these regulatory bodies may enhance the voluntary
disclosure of IC information in the annual reports of listed companies by developing
disclosure guidelines.
The paper is structured as follows. Section 2 reviews literature on the relationship
between IC information and firm value. This is followed by the theoretical framework
and hypotheses development section. Section 4 discusses the research method.
Section 5 provides the results and their discussions. Section 6 concludes the paper.
2. Literature review
Very few studies have been conducted to examine the effects of IC disclosure on market
value or MCAP; among them are: Abdolmohammadi (2005) in the USA, Orens et al.
(2009) in continental European countries and Abeysekera (2011) in Sri Lanka. These
studies found that there is a positive significant relationship between IC disclosure and
MCAP. The argument underlining such a relationship is that when there are IC related
activities, it would be a significant part of a companys values. Thus, these values
contribute to the MCAP of the company. As a result, a company would expect to report
these values with more IC disclosure to explain their effects on MCAP[3]. Supporting
empirical evidence can be found, for example, in Abdolmohammadi (2005). He found
that the IC disclosure in the annual reports of US companies had a highly significant
( p , 0.01) relationship with their market values. This finding indicates that there are
greater benefits than costs for companies to disclose more IC information voluntarily
(Abdolmohammadi, 2005). Similar to Abdolmohammadi (2005), Orens et al. (2009)
focused on the impact of internet-IC disclosure (i.e. web-based) on the company value
for four continental European countries (i.e. Belgium, France, Germany and
The Netherlands). The findings of their study supported those of Abdolmohammadi
(2005), as they found that there was a positive significant effect on the extent of
internet-IC disclosure on company value. Further support for the significant
relationship between IC disclosure and MCAP can be found in Citron et al. (2005).
They found that there was a positive relationship between IC disclosure in the annual
reports and the market value of UK companies (although this relationship was
significant only for EXC and INC, but not for HUC).
On the other hand, Abeysekera (2011) reports a study conducted in a developing
country, Sri Lanka, to examine the influence of IC disclosure (i.e. narrative, visual and
numerical) on market value of companies during two political settings (i.e. civil war and
temporary truce). He found that IC disclosure (i.e. narrative disclosure) had a positive
significant effect on the MCAP during the period of temporary truce, but not during

Effects of IC
information

87

JHRCA
15,2

Downloaded by FREIE UNIVERSITAT BERLIN At 05:44 13 May 2015 (PT)

88

the civil-war period. These findings are interesting as the results, during peace,
are consistent with the findings of the studies in the developed countries. Overall, it can
be seen that the findings of the positive significant relationship (i.e. between IC
disclosure and market value) are consistent with the findings of the general disclosure
literature (e.g. voluntary, mandatory and both) which found that the extent of disclosure
in the annual reports positively affect the MCAP.
Within the extant of Malaysian literature, there are a number of studies that examined
the issue of IC from different perspectives (e.g. measurement, performance, disclosure
and usefulness), such as Bontis et al. (2000), Goh and Lim (2004), Seetharaman et al. (2004),
Saudah et al. (2004), Wan Fadzilah et al. (2004), Faridah (2004), Goh (2005), Amilia (2006),
Abdul Latif and Fauziah (2007), Huang et al. (2007), Shaniz Khan and Daing Nasir (2007),
Zuliana (2007), Norman et al. (2009), Amrizah and Rashidah (2009), Huang et al. (2010) and
Ousama et al. (2011). However, none of these studies extended IC disclosure in the annual
reports to investigate its affects on MCAP. Thus, the current paper can be considered as
the first to test the relationship between IC disclosure and market value in Malaysia.
Consequently, it is hoped that a study in this area would produce findings that are
beneficial, while simultaneously filling the gap in the Malaysian IC literature.
3. Theoretical framework and hypotheses
Previous studies have tried to identify a link between disclosure in general (i.e. voluntary,
mandatory and both) and MCAP (Healy and Palepu, 1993; Welker, 1995; Botosan, 1997;
Lang and Lundholm, 2000). The findings of these studies reveal that increasing the
extent of disclosure results in decreasing the misevaluation of a companys share price,
hence increasing its MCAP. However, with regards to IC disclosure, as mentioned
earlier, there are few studies, which examine the relationship between IC information
disclosure by companies and their MCAP. The findings of these studies also indicate
that there is a significant positive relationship between IC disclosure and MCAP. Thus,
these findings are consistent with findings on the voluntary disclosure studies which
found the extent of voluntary disclosure in the annual reports and MCAP to be positively
associated (Abdolmohammadi, 2005).
Resource-based theory can be used to explain the relationship between the IC
disclosure in the annual reports and the MCAP. It is known that IC is one component of
the company capital and resources, and it contributes to the wealth creation of the
company. Therefore, when companies disclose more IC information in their annual
reports, it enables the stakeholders to understand the wealth creation process. As a
result, such disclosure will decrease the misevaluation of the companys share prices,
and increase MCAP. Furthermore, the signalling theory can also be applied to explain
this relationship. The management of a company that has good value (as a result of the
value creation process of its capital and resources which include IC) will try to signal this
fact by disclosing more IC information in the annual reports to its stakeholders. Thus,
this information might be reflected in the market value (MCAP) of the company. On the
other hand, if there is no effect of such information on the market value of the company,
there would be no reason to signal. In addition, disclosing information about IC might
enable the user to better determine the companys future value which might result in
increasing the companys share price.
Based on the above discussion, the following theoretical framework is developed
(Figure 1). The framework depicts that IC information (i.e. independent variable IV)

will affect the MCAP (i.e. dependent variable DV). In addition, the framework shows
that book value, net profit, firm size and leverage (i.e. control variables CVs) will also
affect the MCAP.
Therefore, based on the theoretical framework, it can be hypothesized that IC
disclosure in the annual reports would have a positive relationship on MCAP. Thus,
the following hypotheses were formulated, in the alternate form:
H1. The disclosure of IC information by Malaysian-listed companies in the year
2002 has a positive significant effect on their MCAP.

Effects of IC
information

89

Downloaded by FREIE UNIVERSITAT BERLIN At 05:44 13 May 2015 (PT)

H2. The disclosure of IC information by Malaysian-listed companies in the year

2006 has a positive significant effect on their MCAP.
4. Research method
4.1 Sample selection
The paper focuses on listed companies on the Main Board[4] in BM for two years,
i.e. 2002 and 2006. The selection of the listed companies is due to several reasons. First,
the listed companies, being large companies, have more resources to start and sponsor
new initiatives in practising disclosure in new areas such as IC information. Second,
the issue of accessibility of the annual reports, where listed companies are required to
provide a copy of their annual reports to BM. Therefore, it is easy to access all listed
companies annual reports via BMs web site. Also, listed companies were selected as
the subject of study since their MCAP was required.
The selection of the years 2002 and 2006 was made due to the fact that IC is a new area
both internationally and in Malaysia. Internationally, companies started to measure and
disclose their IC in the late-1990s. However, in Malaysia, the IC issues (e.g. measurement
and disclosure) are still new and still in their development stage in companies.
In addition, the practices of disclosure of IC may still be considered limited. Furthermore,
the National Annual Corporate Report Awards (NACRA) were introduced in Malaysia in
the year 2000. The introduction of NACRA had the general aim of encouraging listed
companies to be competitive in preparing and presenting their corporate annual reports
and improving the level of disclosure of information (NACRA Organising Committee,
2008). Thus, choosing earlier years (e.g. 1999-2001) might not be appropriate. Therefore,
the gap of two years (i.e. years 2000 and 2001) was given since the introduction of
NACRA to allow time for NACRA to take effect, hence the selection of year 2002. Then,
for Malaysian-listed companies, financial reporting standard (FRS) 138 (i.e. intangible
assets) became effective for the financial period beginning January 1, 2006. FRS 138 may
indirectly affect the extent of intellectual capital disclosure (EICD) of Malaysian
IC information
(IV)

Book value
Net profit
Firm size
Leverage
(CVs)

Market
capitalization
(DV)

Figure 1.
Theoretical framework

JHRCA
15,2

Downloaded by FREIE UNIVERSITAT BERLIN At 05:44 13 May 2015 (PT)

90

companies as intangible assets may be considered as components of IC. Therefore, EICD

may have improved in 2006 as well as affecting MCAP; thus the year 2006 was selected
as the other sample period for the study.
Furthermore, although the potential affect of EICD on MCAP may be studied
annually (i.e. in 2003, 2004 and 2005), yearly changes of EICD would be minimal. Thus,
a gap period would give the sample companies time to enhance their EICD as well as
its possible association with MCAP. Hence, the effect of EICD on MCAP was tested in
the years 2002 and 2006.
In 2002, the population of listed companies on BM was 456 and they were classified
into the following strata (Investors Digest, 2003): consumer products; industrial
products; construction; trading and services; properties; plantations and others
(i.e. technology, infrastructure project companies, hotels and mining). Therefore, in
order to have a sample representative of the population, a stratified sampling method
was used. Then, a systematic sampling method was utilized as it is statistically more
efficient than a simple random sample (Cooper and Schindler, 2003, p. 193). This
method (i.e. systematic sampling) was carried out within the industry groups, in order
to have approximately 20 per cent of the companies in each industry as the sample.
Therefore, the sample of the study consists of 91 companies with a total number of
182 annual reports for the years 2002 and 2006. Table I shows the sample size of the
companies and annual reports based on sectors.
4.2 Data collection
A number of methods were used to obtain the secondary data in this paper.
First, the extent of IC disclosure, book value, net profit, firm size and leverage data
(i.e. independent variables) were gathered from the annual reports of the sample
companies for the years 2002 and 2006. Next, the MCAP data (i.e. dependent variable)
was obtained through the Bloomberg database.
4.3 Variables measurement
Dependent variable. MCAP is the dependent variable in the regression model; it is
measured as the market value of shareholders equity, which is computed by
multiplying its share price by the number of shares outstanding at the end of the
accounting year (Hussey, 1999; Ibrahim et al., 2004). The MCAP in this paper for the
years 2002 and 2006 were obtained from Bloomberg database, which is consistent with
prior studies (Abdolmohammadi, 2005).
Industry

Table I.
Sample size based
on companies and
annual reports

Consumer products
Industrial products
Construction
Trading and services
Properties
Plantation
Others
Total

Population

Sample for one year

Annual reports for 2002 and 2006

58
105
35
106
83
38
16
456

11
21
7
21
17
8
6
91

22
42
14
42
34
16
12
186

Downloaded by FREIE UNIVERSITAT BERLIN At 05:44 13 May 2015 (PT)

Independent and control variables. In addition to the independent variable (EICD), there
are four control variables (i.e. book value, net profit, firm size and leverage) included in
the regression model. The inclusion of these control variables was due to their
plausible effect on MCAP as found by prior studies (Abdolmohammadi, 2005;
Citron et al., 2005; Orens et al., 2009; Abeysekera, 2011). The measurement of the
independent and control variables are specified as follows:
(1) EICD is measured based on a disclosure index that was developed by adopting
Sanchez et al.s (2000) work with significant modifications based on prior IC
disclosure literature (Sveiby, 1997; Stewart, 2000; Guthrie and Petty, 2000;
Bontis et al., 2000; Brennan, 2001; Williams, 2001; Bontis, 2003; Ordonez de Pablos,
2003; Olsson, 2004; Goh and Lim, 2004; Seetharaman et al., 2004; Abeysekera and
Guthrie, 2005; Abdolmohammadi, 2005; White et al., 2007). Finally, the disclosure
index consists of 101 items that are within the three IC categories (i.e. 35 items for
INC, 35 items for EXC and 36 items for HUC)[5]. A dichotomous scoring system
was used, where 1 is assigned when an item in the disclosure index is disclosed
in the annual report and 0 otherwise, as measured in prior studies
(Abdolmohammadi, 2005; White et al., 2007; Omar, 2008).
(2) Book value (BVALUE) is measured by the difference between total assets and
total liabilities at the end of the accounting year, as measured in prior studies
(e.g. Ibrahim et al., 2004; Abdolmohammadi, 2005).
(3) Net profit (NETPROFT) is measured by the net profit of the company at the end
of a reporting year as measured in prior studies (Citron et al., 2005; Zuliana,
2007; Orens et al., 2009).
(4) Firm size (SIZE) is measured by the total assets of a company at the end of a
reporting year, as measured by prior studies (Beaulieu et al., 2002; Bozzolan et al.,
2003).
(5) Leverage (LEVERAGE) is measured as a ratio of total liabilities to shareholders
equity, as measured in prior studies (Williams, 2001; Zuliana, 2007; Omar, 2008).
4.4 Regression model
To examine whether the market perceives IC disclosure information as an important
variable in the determination of the companys market value, a multiple ordinary least
square regression model based on the transformation of the variables to normal scores
was adopted[6]. The regression model is adopted from prior studies with modification[7]
(Abdolmohammadi, 2005; Orens et al., 2009; Abeysekera, 2011). The framework of this
model was originally developed by Ohlson (1995). The model includes the dependent
variable (MCAP), independent variable (EICD) and control variables (BVALUE,
NETPROFT, SIZE and LEVERAGE) and specified as follows:
MCAP jt a b1 EICDjt b2 BVALUE jt b3 NETPROFT jt b4 SIZE jt
b5 LEVERAGE jt ejt
where:
MCAPjt

market capitalization of company j at year t;

EICDjt

extent of intellectual capital disclosure in the annual report

of company j at year t;

Effects of IC
information

91

JHRCA
15,2

BVALUEjt

book value of company j at year t;

NETPROFTjt net profit of company j at year t;

firm size of company j at year t;

SIZEjt

LEVERAGEjt leverage of company j at year t;

Downloaded by FREIE UNIVERSITAT BERLIN At 05:44 13 May 2015 (PT)

92

ejt

error;

regression intercept; and

bI

parameters to be estimated, i 1, . . . ,5.

5. Results and discussion

As mentioned earlier, the research objective of the paper is to investigate the effects of
IC disclosure (i.e. overall) on MCAP. In other words, it aims to examine the relationship
between the dependent variable (MCAP) and independent variables (EICD, BVALUE,
NETPROFT, SIZE and LEVERAGE). The analysis in this section includes the
descriptive analysis, correlation analysis and regression analysis which will be
discussed in the following subsections.
5.1 Descriptive analysis
Tables II and III provide the descriptive statistics of the variables (i.e. MCAP, EICD,
BVALUE, NETPROFT, SIZE and LEVERAGE) based on raw data for the years 2002
and 2006, respectively. The tables show that MCAP, NETPROFT BVALUE and SIZE
were higher in 2006 compared to 2002. Whereas, LEVERAGE had decreased in 2006
compared to 2002. This indicates that the overall financial performance in 2006 was
better than 2002. In addition, the tables show that the means of the EICD in the annual
reports of listed companies were 0.22 and 0.24 for the years 2002 and 2006,
respectively. These findings show that the EICD in annual reports for the year 2006
was slightly higher compared to the year 2002 which suggests that Malaysian-listed
companies have increased their disclosure of IC information in the later year.

Table II.
Descriptive statistics
of variables for the
year 2002

Table III.
Descriptive statistics
of variables for the
year 2006

Mean
Median
SD

Mean
Median
SD

MCAP
(million)

EICD

BVALUE
(million)

NETPROFT
(million)

SIZE
(million)

LEVERAGE

1,053
202
3,213

0.223
0.207
0.055

784
254
1,902

43
16
181

1,680
582
4,122

1.443
0.634
2.112

MCAP
(million)

EICD

BVALUE
(million)

NETPROFT
(million)

SIZE
(million)

LEVERAGE

1,806
224
4,950

0.238
0.218
0.066

996
334
2,432

90
19
301

2,045
650
5,021

1.330
0.643
1.857

Downloaded by FREIE UNIVERSITAT BERLIN At 05:44 13 May 2015 (PT)

5.2 Correlation analysis

Pearson correlation analyses were performed for the years 2002 and 2006. Table IV
presents the correlation analysis between all the variables for the year 2002. The
results show that the EICD, BVALUE and NETPROFT were positively correlated with
each other. The initial analysis of the relationship between the dependent variable and
the independent variables shows that the MCAP was statistically significant with the
EICD, BVALUE, NETPROFT and SIZE ( p , 0.01), but not with LEVERAGE. These
findings reveal that there is an association between the MCAP of the Malaysian-listed
companies and the extent of IC disclosure (i.e. overall) in their annual reports. However,
further analysis of this relationship will be based on the regression analysis.
Next, Table V presents the correlation analysis for the year 2006. Similarly,
all variables were positively correlated with each other. The results also show that
the dependent variable (MCAP) was significantly positively correlated ( p , 0.01) with
most of the independent variables (EICD, BVALUE, NETPROFT and SIZE) except
LEVERAGE. Thus, the results for 2006 confirm that there is a strong association
between the extent of IC disclosure (i.e. overall) in the annual reports of
Malaysian-listed companies and their MCAP. Further analysis is carried out based on
the regression.

Effects of IC
information

93

5.3 Regression analysis

Regression analyses for the years 2002 and 2006 were performed[8]. Tables VI and VII
report the empirical results of the relationship between MCAP and EICD (i.e. overall) in
the annual reports of Malaysian-listed companies[9].
Table VI presents the empirical results of the regression analysis for the year 2002,
which shows that the adjusted R 2 was 0.76. The value of R 2 indicates that the ability of
the model to explain the relationship between the dependent and independent
variables is 76 per cent. The adjusted R 2 in the current paper is higher than 0.14 by
Abdolmohammadis (2005) study. In addition, the table shows that the F value was 58.04
with a significance level of 0.000, revealing that the model fits the data. The intercept was
not significant ( p 1.000) which indicates that there is unlikely to be other significant
independent variables missed in the equation of the regression model.
MCAP
MCAP
EICD
BVALUE
NETPROFT
SIZE
LEVERAGE

1.000

EICD
0.593 *
0.000
1.000

BVALUE

NETPROFT

0.824 *
0.000
0.551 *
0.000
1.000

0.703 *
0.000
0.473 *
0.000
0.578 *
0.000
1.000

SIZE
0.680 *
0.000
0.489 *
0.000
0.876 *
0.000
0.447 *
0.000
1.000

LEVERAGE
20.109
0.306
20.019
0.859
20.080
0.450
20.170
0.107
0.317 *
0.002
1.000

Notes: Significant at: *0.01 level (2-tailed); the values in bold font are the Pearson/Spearman
correlation coefficients; the values in italic font are the significance levels

Table IV.
Correlation analysis
results of the variables
for the year 2002

JHRCA
15,2

MCAP
MCAP
EICD

94

1.000

EICD

BVALUE

NETPROFT

0.661 * * *
0.000
1.000

0.865 * * *
0.000
0.581 * * *
0.000
1.000

0.687 * * *
0.000
0.450 * * *
0.000
0.613 * * *
0.000
1.000

BVALUE
NETPROFT

Downloaded by FREIE UNIVERSITAT BERLIN At 05:44 13 May 2015 (PT)

SIZE
Table V.
Correlation analysis
results of the variables
for the year 2006

0.746 * * *
0.000
0.560 * * *
0.000
0.833 * * *
0.000
0.440 * * *
0.000
1.000

20.153
0.148
0.109
0.304
20.148
0.162
20.234 * *
0.025
0.204 *
0.053
1.000

Notes: Significance at: * * *0.01, * *0.05 and *0.10 levels (two-tailed); the values in bold font are the
Pearson/Spearman correlation coefficients; the values in italic font are the significance levels

Constant
EICD
BVALUE
NETPROFT
SIZE
LEVERAGE

Coefficient

SE

t-statistic

Sig. t

2 0.000
0.131
0.817
0.304
2 0.266
0.095

0.049
0.064
0.178
0.066
0.180
0.087

0.000
2.057
4.584
4.608
2 1.480
1.092

1.000
0.043 *
0.000 * *
0.000 * *
0.142
0.278

Notes: Significance at: * * *0.01 and * *0.05 levels; R 2 0.773; Adj. R 2 0.760; F-value 58.041;
Sig. F 0.000; D-W 2.158

Variable

Table VII.
Regression results of the
effects of ICD on MCAP
for the year 2006

LEVERAGE

LEVERAGE

Variable

Table VI.
Regression results of the
effects of ICD on MCAP
for the year 2002

SIZE

Constant
EICD
BVALUE
NETPROFT
SIZE
LEVERAGE

Coefficient

SE

t-statistic

Sig. t

20.000
0.215
0.439
0.217
0.185
20.098

0.044
0.059
0.112
0.060
0.103
0.059

20.001
3.655
3.909
3.615
1.798
21.668

0.999
0.000 * * *
0.000 * * *
0.001 * * *
0.076 *
0.099 *

Notes: Significance at: * * *0.01 and *0.10 levels; R 2 0.824; Adj. R 2 0.813; F-value 79.506;
Sig. F 0.000; D-W 1.988

The results show that EICD was positively significant ( p , 0.05) even with BVALUE
and NETPROFT in the regression model. The results reveal that the EICD can be
considered as a predictor of MCAP. This finding is consistent with prior IC disclosure
studies (Abdolmohammadi, 2005; Orens et al., 2009; Abeysekera, 2011), which found it to
be statistically significant. The significant positive coefficient of EICD (i.e. overall)
indicates that the more disclosure of information about IC, the higher MCAP would be.
Several possible reasons can explain the significance of the EICD. First, as there

Downloaded by FREIE UNIVERSITAT BERLIN At 05:44 13 May 2015 (PT)

is a substantial benefit of increasing the market value of a company, there will be an

incentive for the company to disclose more IC information (Abdolmohammadi, 2005).
Second, disclosing more IC information in the annual reports enables the stakeholders to
understand the wealth creation process, hence decrease the misevaluation of the
companys share prices, and increase MCAP. Third, according to the signalling theory,
the company with a good value will signal this fact by disclosing more IC information in
the annual reports to its stakeholders. Disclosing IC information may capture some
of the hidden values that are not measured in BVALUE. Similarly, this will reduce the
misevaluation of the share prices, thus increase market value of the company. Therefore,
based on the results, it can be concluded that the EICD in the annual reports of
Malaysian-listed companies has an effect on their MCAP, thus hypothesis H1, that IC
disclosure for the year 2002 would have a positive impact on MCAP, is supported.
In addition, BVALUE and NETPROFT have their influence on the MCAP as they
were statistically significant ( p , 0.01). On the other hand, SIZE and LEVERAGE were
not significant. The findings of the BVALUE and NETPROFT are consistent with the
findings of Abeysekera (2011), but inconsistent with the findings of Abdolmohammadi
(2005) who found them not to be significant. In the Malaysian context, the results
support that book value and the net profit of the companies are deemed important by the
market in determining the value of the company.
Next, the regression model results for the year 2006 are shown in Table VII. The
table shows that adjusted R 2 was 0.81 which indicates that the model is able to explain
about 81 per cent of the relationship between dependent and independent variables.
This is a considerable finding, as only 19 per cent of MCAP in the Malaysian market
remains unexplained when the extent of IC disclosure is included in the equation.
Examining the fitness of the model, the table shows that the model is significant at
0.01 with F value of 79.51. This indicates the model fits the data. Similar to the model
for the year 2002, the intercept was not significant ( p 0.999), indicating that other
important explanatory variables are unlikely to be missed in the equation.
Similarly, the results show that the EICD was statistically significant at the 0.000
level ( p , 0.01). Therefore, it is more significant in the year 2006 compared to the year
2002. In fact, even with the inclusion of key-control variables such as BVALUE and
NETPROFT, EICD is highly significant, thus indicating that the EICD in the annual
reports is a predictor of MCAP. In addition, the BVALUE and NETPROFT were
positively significant at the 0.000 level ( p , 0.01), and SIZE and LEVERAGE were
weakly significant ( p , 0.10). Therefore, it can be said that the MCAP of
Malaysian-listed companies can be affected by the extent of IC disclosure (i.e. overall)
in their annual reports; hence, once again, hypothesis H2 for the year 2006 is supported.
5.4 Additional analysis
As reported in the correlation analysis (i.e. Tables IV and V), there was a high correlation
between MCAP and BVALUE, and MCAP and NETPROFT. Therefore, it may indicate
that BVALUE and NETPROFT are behaving very similarly where each variable may
not add any incremental value to the regression model[10]. Hence, further analysis was
conducted by omitting BVALUE. Tables VIII and IX report the regression results for the
years 2002 and 2006, respectively. The results support the results found in the main
regression models in Tables VI and VII which indicates that EICD has a positive
significant relationship with the MCAP at 0.05 and 0.01 significance levels for 2002

Effects of IC
information

95

JHRCA
15,2

Downloaded by FREIE UNIVERSITAT BERLIN At 05:44 13 May 2015 (PT)

96

and 2006, respectively. In addition, the results show that all control variables
(i.e. NETPROFT, SIZE and LEVERAGE) are statistically significant in the two years
(i.e. 2002 and 2006).
5.5 Sensitivity analysis
A sensitivity analysis was conducted using a dummy variable for year (i.e. 0 for year
2002 and 1 for year 2006); the results are shown in Table X. The results support the
results in Tables IV and V that EICD significantly impact the MCAP. In addition, the
results supported the significant results of BVALUE and NETPROFT for both years.
However, SIZE and LEVERAGE were not significant, perhaps again due to the
stronger affect of BVALUE on MCAP.
Variable

Table VIII.
Regression results with
omitting BVALUE
for the year 2002

Constant
EICD
NETPROFT
SIZE
LEVERAGE

Constant
EICD
NETPROFT
SIZE
LEVERAGE

t-statistic

Sig. t

20.000
0.175
0.365
0.494
22.200

0.055
0.070
0.072
0.077
0.065

0.000
2.509
5.090
6.440
23.055

1.000
0.014 *
0.000 *
0.000 *
0.003 *

Coefficient

SE

t-statistic

Sig. t

20.000
0.266
0.289
0.515
20.219

0.047
0.062
0.062
0.064
0.054

20.002
4.288
4.702
8.053
24.028

0.999
0.000 *
0.000 *
0.000 *
0.000 *

Notes: Significant at: *0.01 level; R 2 0.792; Adj. R 2 0.783; F-value 81.950; Sig. F 0.000;
D-W 1.981

Variable

Table X.
Regression results of the
sensitivity analysis

SE

Notes: Significant at: *0.01 level; R 2 0.717; Adj. R 2 0.704; F-value 54.594; Sig. F 0.000;
D-W 2.085

Variable

Table IX.
Regression results with
omitting BVALUE
for the year 2006

Coefficient

Constant
EICD
BVALUE
NETPROFT
SIZE
LEVERAGE
YEAR

Coefficient

SE

t-statistic

Sig. t

2 0.000
0.174
0.539
0.261
0.055
2 0.039
2 0.000

0.047
0.043
0.096
0.045
0.092
0.049
0.066

0.000
4.007
5.603
5.826
0.597
2 0.791
0.000

1.000
0.043 *
0.000 * *
0.000 * *
0.551
0.430
1.000

Notes: Significance at: *0.05 and * *0.01 levels; YEAR 0 for the year 2002 and 1 for the year 2006;
R 2 0.790; Adj. R 2 0.783; F-value 110.000; Sig. F 0.000; D-W 2.074

Downloaded by FREIE UNIVERSITAT BERLIN At 05:44 13 May 2015 (PT)

6. Conclusion and suggestions for future research

The aim of the paper was to find empirical evidence that IC disclosure in the annual
report of the Malaysian-listed companies affects their MCAP. The empirical findings of
the correlation analysis show that there is a positive relationship between EICD and
MCAP. These findings are further supported by the regression models, which confirm
that there is a positive significant relationship between EICD and MCAP. Hence, the
EICD can be considered as a predictor of MCAP. Thus, it can be concluded that IC
disclosure by Malaysian-listed companies in their annual reports does indeed affect
their MCAP. In addition, the correlation analysis shows that there is significant
association between BVALUE, NETPROFT and SIZE (i.e. control variables) and
MCAP. The results of the correlation tests are generally supported by the findings of
the regression analyses.
Based on the findings mentioned above, it can be said that the empirical evidence
obtained in this paper can be considered as useful for the Malaysian-listed companies
as the added costs of IC disclosure is justified by its positive effect on the market value
for companies that are disclosing this information. Moreover, these results should
motivate companies that are not disclosing to do so. In addition, the findings of this
paper could be useful for some of the regulatory bodies in Malaysia (e.g. the MASB,
BM), perhaps to develop guidelines on IC disclosure, not only to enhance transparency
and increase confidence in the capital market, but because the results of this paper
have provided evidence on the significance of IC disclosure in the market.
This study has certain limitations, mainly due to it being an initial study of the
effect of IC disclosure on MCAP in Malaysia. These limitations are: the paper used only
the data of two years (i.e. 2002 and 2006); it used a sample drawn from the population of
listed companies; and it only included a few control variables in the regression model.
Future research may consider conducting time series analysis, extending the sample to
the population of listed companies in Malaysia, and including more control variables to
better explain MCAP. Nevertheless, despite these limitations, it is hoped that the study
provides ample evidence to be useful to companies and regulators to promote IC
disclosure, as well as inspire more studies in this area of research.
Notes
1. BM is the Malaysian Stock Exchange.
2. MCAP or market valuation is the value of a company obtained by multiplying the number
of its issued ordinary shares by their market prices (Hussey, 1999, p. 231).
3. That could be explained by using signalling theory, where companies with good values are
likely to signal their values with more voluntary disclosure.
4. Main Board refers to a board with larger sized companies that meet more listing
requirements compared to the Second Board of the Bursa, for example, minimum paid-up
capital of RM 60 million (Bursa Malaysia, 2009).
5. The disclosure index is available upon request from the first author.
6. The transformation of the regression variables based on normal scores, which is referred to
as the Van der Waerden approach, was proposed by Cooke (1998). One of advantages of this
approach is that the regression results will have exact statistical properties (Cooke, 1998).
In addition, transforming the variables to normal scores will solve the problems of
non-linearity and monotonicity (Cooke, 1998).

Effects of IC
information

97

JHRCA
15,2

7. The difference in the current model compared to prior models is in terms of using the
normalized variables.
8. All regression analysis assumptions were tested and results show that they were met.
9. The paper has performed regressions based on the categories of IC (i.e. INC, EXC and HUC)
for both years. The results are consistent with the main findings.

Downloaded by FREIE UNIVERSITAT BERLIN At 05:44 13 May 2015 (PT)

98

10. BVALUE and SIZE seem to be even more highly correlated than BVALUE and NETPROFT,
thus BVALUE is excluded from the additional analysis.

References
Abdolmohammadi, M.J. (2005), Intellectual capital disclosure and market capitalization,
Journal of Intellectual Capital, Vol. 6 No. 3, pp. 397-416.
Abdul Latif, S. and Fauziah, S. (2007), Intellectual capital management in Malaysian public
listed companies, International Review of Business Research Papers, Vol. 3 No. 2,
pp. 262-74.
Abeysekera, I. (2006), The project of intellectual capital disclosure: researching the research,
Journal of Intellectual Capital, Vol. 7 No. 1, pp. 61-77.
Abeysekera, I. (2011), The relation of intellectual capital disclosure strategies and market value
in two political settings, Journal of Intellectual Capital, Vol. 12 No. 2, pp. 319-38.
Abeysekera, I. and Guthrie, J. (2005), An empirical investigation of annual reporting trends of
intellectual capital in Sri Lanka, Critical Perspectives on Accounting, Vol. 16 No. 3,
pp. 151-63.
Al-Ali, N. (2003), Comprehensive Intellectual Capital Management, John Wiley & Sons,
New York, NY.
Amilia, S.A.M. (2006), Relationship between board composition and company performance:
analysis of financial and intellectual capital measures, master thesis, International
Islamic University Malaysia, Kuala Lumpur.
Amrizah, K. and Rashidah, A.R. (2009), Enhancing organisation effectiveness through human,
relational and structural capital: an empirical analysis, Malaysian Accounting Review,
Vol. 8 No. 1, pp. 1-17.
April, K.A., Bosma, P. and Deglon, D.A. (2003), IC measurement and reporting: establishing a
practice in S.A. mining, Journal of Intellectual Capital, Vol. 4 No. 2, pp. 165-80.
Beaulieu, P.R., Williams, S.M. and Wright, M.E. (2002), Intellectual capital disclosures in
Swedish annual reports, in Bontis, N. (Ed.), World Congress on Intellectual Capital
Reading, Butterworth-Heinemann, Boston, MA, pp. 135-56.
Bontis, N. (2003), Intellectual capital disclosure in Canadian corporations, Journal of Human
Resource Costing & Accounting, Vol. 7 No. 1, pp. 9-20.
Bontis, N., Keow, W.C.K. and Richardson, S. (2000), Intellectual capital and business
performance in Malaysian industries, Journal of Intellectual Capital, Vol. 1 No. 1,
pp. 85-100.
Botosan, C. (1997), Disclosure level and the cost of equity capital, The Accounting Review,
Vol. 72 No. 3, pp. 323-49.
Bozzolan, S., Favotto, F. and Ricceri, F. (2003), Italian annual intellectual capital disclosure:
an empirical analysis, Journal of Intellectual Capital, Vol. 4 No. 4, pp. 543-58.
Brennan, N. (2001), Reporting intellectual capital in annual reports: evidence from Ireland,
Accounting, Auditing & Accountability Journal, Vol. 14 No. 4, pp. 423-36.

Downloaded by FREIE UNIVERSITAT BERLIN At 05:44 13 May 2015 (PT)

Bursa Malaysia (2009), Main market listing requirements, available at: www.klse.com.my/
website/bm/regulation/rules/listing_requirements/main_market.html (accessed March 29,
2009).
Chen, M., Cheng, S. and Hwang, Y. (2005), An empirical investigation of the relationship
between intellectual capital and firms market value and financial performance, Journal of
Intellectual Capital, Vol. 6 No. 2, pp. 159-76.
Citron, D., Holden, J., Selim, G. and Oehlche, F. (2005), Do voluntary intellectual capital
disclosure provide information about firms intangible assets?, paper presented at the 9th
Financial Reporting and Business Communication Conference, Cardiff Business School,
London, July 7-8.
Cooke, T.E. (1998), Regression analysis in accounting disclosure studies, Accounting and
Business Research, Vol. 28 No. 3, pp. 209-24.
Cooper, D.R. and Schindler, P.S. (2003), Business Research Methods, 8th ed., McGraw-Hill,
New York, NY.
Drucker, P.F. (1992), The Age of Discontinuity: Guidelines to Our Changing Society, 2nd ed.,
Transaction Publishers, New Brunswick, NJ.
Faridah, I. (2004), Relationship between board structure and firms intellectual capital
performance, master thesis, Universiti Teknologi Mara, Kuala Lumpur.
Goh, P.C. (2005), Intellectual capital performance of commercial banks in Malaysia, Journal of
Intellectual Capital, Vol. 6 No. 3, pp. 385-96.
Goh, P.C. and Lim, K.P. (2004), Disclosing intellectual capital in company annual reports:
evidence from Malaysia, Journal of Intellectual Capital, Vol. 5 No. 3, pp. 500-10.
Guthrie, J. and Petty, R. (2000), Intellectual capital: Australian annual reporting practices,
Journal of Intellectual Capital, Vol. 1 No. 3, pp. 241-51.
Hassan, O.A.G., Giorgioni, G., Romilly, P. and Power, D.M. (2011), Voluntary disclosure and risk
in an emerging market, Journal of Accounting in Emerging Economies, Vol. 1 No. 1,
pp. 33-52.
Healy, P. and Palepu, K.G. (1993), The effect of firms financial disclosure strategies on stock
prices, Accounting Horizons, Vol. 7 No. 1, pp. 1-11.
Huang, C.C., Luther, R. and Tayles, M. (2007), An evidence-based taxonomy of intellectual
capital, Journal of Intellectual Capital, Vol. 8 No. 3, pp. 386-408.
Huang, C.C., Tayles, M. and Luther, R. (2010), Contingency factors influencing the availability of
internal intellectual capital information, Journal of Financial Reporting and Accounting,
Vol. 8 No. 1, pp. 4-21.
Hussey, R. (1999), A Dictionary of Accounting, 2nd ed., Oxford University, New York, NY.
Ibrahim, M.K., Raudah, D., Haslinda, Y. and Normahiran, Y. (2004), Market value and balance
sheet numbers: evidence from Malaysia, in Khairul, A.K., Ibrahim, M.K. and
Mohamed Zain, M. (Eds), Financial Reporting in Malaysia: Some Empirical Evidence,
1st ed., Utusan Publications & Distributors Sdn Bhd., Kuala Lumpur, pp. 40-51.
Investors Digest (2003), Classification of securities, Investors Digest, January, p. 76.
Lang, M.H. and Lundholm, R.J. (2000), Voluntary disclosure during equity offerings: Reducing
information asymmetry or hyping the stock?, Contemporary Accounting Research, Vol. 17
No. 4, pp. 623-62.
Leadbeater, C. (1999), New measures for the new economy, paper presented at the International
Symposium on Measuring and Reporting Intellectual Capital: Experience, Issues, and
Prospects, Amsterdam, June 9-11.

Effects of IC
information

99

JHRCA
15,2

Downloaded by FREIE UNIVERSITAT BERLIN At 05:44 13 May 2015 (PT)

100

NACRA Organising Committee (2008), NACRA 2008: National Annual Corporate Report
Awards, Towards Accountability & Excellence, NACRA Organising Committee,
Kuala Lumpur.
Norman, M.S., Mara Ridhuan, C.A.R. and Mohamat, S.H. (2009), Ownership structure and
intellectual capital performance in Malaysia, Asian Academy of Management Journal of
Accounting and Finance, Vol. 5 No. 1, pp. 1-29.
Ohlson, J. (1995), Earnings, book values and dividends in equity valuation, Contemporary
Accounting Research, Vol. 11 No. 2, pp. 661-87.
Olsson, B. (2004), Intellectual capital disclosure through annual reports: A study of the Swedish
retail industry, Journal of Human Resource Costing & Accounting, Vol. 8 No. 2, pp. 57-72.
Omar, I.H.J. (2008), Voluntary intellectual capital disclosure: evidence from Bahrain,
working paper, University of Bahrain, Bahrain.
Ordonez de Pablos, P. (2003), Intellectual capital reports in Spain: a comparative view, Journal
of Intellectual Capital, Vol. 4 No. 1, pp. 61-81.
Orens, R., Aerts, W. and Lybaert, N. (2009), Intellectual capital disclosure, cost of finance and
firm value, Management Decision, Vol. 47 No. 10, pp. 1536-54.
Ousama, A.A., Fatima, A.H. and Hafiz Majdi, A.R. (2011), Usefulness of intellectual capital
information: prepares and users views, Journal of Intellectual Capital, Vol. 12 No. 3
(forthcoming).
Ragab, A.A. and Omran, M.M. (2006), Accounting information, value relevance, and investors
behavior in the Egyptian equity market, Review of Accounting and Finance, Vol. 5 No. 3,
pp. 279-97.
Sanchez, P., Canibano, L., Covarsi, M.G., Chaminade, C., Olea, M., Escobar, C.G. and Pacheco, R.
(2000), Guidelines for the measurement and disclosure of intangibles, working paper,
MERITUM Project, Seville, Spain.
Saudah, S., Tayles, M.E. and Pike, R.H. (2004), Intellectual capital: an evolutionary change in
management accounting practices, Working Paper No. 04/29, Bradford University,
Bradford.
Seetharaman, A., Low, K.L.T. and Saravanan, A.S. (2004), Comparative justification on
intellectual capital, Journal of Intellectual Capital, Vol. 5 No. 4, pp. 522-39.
Shaniz Khan, M.B. and Daing Nasir, D.I. (2007), The effect of intellectual capital on the perceived
relevance of the balance sheet as an indicator of future financial performance,
International Journal of Knowledge Culture and Change Management, Vol. 7 No. 1, pp. 1-10.
Stewart, T.A. (2000), Intellectual Capital: The New Wealth of Organizations, Nicholas Brealey,
London (reprinted from first published in hardback, 1997).
Sveiby, K.E. (1997), The New Organization Wealth: Managing and Measuring Knowledge Based
Assets, Berrett-Koehler, San Francisco, CA.
Wan Fadzilah, W.Y., Muhamad, J. and Daing Nasir, D.I. (2004), The interactive effects of human
capital, structural capital and social capital on firm performance, Asian Academy of
Management Journal, Vol. 9 No. 2, pp. 1-18.
Welker, M. (1995), Disclosure policy, information asymmetry, and liquidity in equity markets,
Contemporary Accounting Research, Vol. 11 No. 2, pp. 801-27.
White, G., Lee, A. and Tower, G. (2007), Drivers of voluntary intellectual capital disclosure in
listed biotechnology companies, Journal of Intellectual Capital, Vol. 8 No. 3, pp. 517-37.
Whiting, R.H. and Miller, J.C. (2008), Voluntary disclosure of intellectual capital in New Zealand
annual reports and the hidden value, Journal of Human Resource Costing & Accounting,
Vol. 12 No. 1, pp. 26-50.

Williams, S.M. (2001), Is intellectual capital performance and disclosure practices related?,
Journal of Intellectual Capital, Vol. 2 No. 3, pp. 192-203.
Wong, M. and Gardner, C. (2005), Intellectual capital disclosure: New Zealand evidence,
paper presented at the Accounting & Finance Association of Australia and New Zealand
(AFAANZ) Conference, Melbourne, July 3-5.
Zuliana, Z. (2007), Factors influencing intellectual capital disclosure: a Malaysian evidence, master
thesis, International Islamic University Malaysia, Kuala Lumpur.

Downloaded by FREIE UNIVERSITAT BERLIN At 05:44 13 May 2015 (PT)

Corresponding author
Ousama Abdulrahman Anam can be contacted at: osamaanam@gmail.com

To purchase reprints of this article please e-mail: reprints@emeraldinsight.com

Or visit our web site for further details: www.emeraldinsight.com/reprints

Effects of IC
information

101

Downloaded by FREIE UNIVERSITAT BERLIN At 05:44 13 May 2015 (PT)

This article has been cited by:

1. Subhash Abhayawansa, Mohammad Azim. 2014. Corporate reporting of intellectual capital: evidence
from the Bangladeshi pharmaceutical sector. Asian Review of Accounting 22:2, 98-127. [Abstract] [Full
Text] [PDF]
2. Sanni Mubaraq, Abdifatah Ahmed Haji. 2014. The impact of corporate governance attributes on
intellectual capital disclosure: A longitudinal investigation of Nigerian banking sector. Journal of Banking
Regulation 15, 144-163. [CrossRef]
3. Cemil Kuzey, Ali Uyar, Dursun Delen. 2014. The impact of multinationality on firm value: A comparative
analysis of machine learning techniques. Decision Support Systems 59, 127-142. [CrossRef]
4. Ramin Gamerschlag. 2013. Value relevance of human capital information. Journal of Intellectual Capital
14:2, 325-345. [Abstract] [Full Text] [PDF]
5. Abdifatah Ahmed Haji, Sanni Mubaraq. 2012. The trends of intellectual capital disclosures: evidence from
the Nigerian banking sector. Journal of Human Resource Costing & Accounting 16:3, 184-209. [Abstract]
[Full Text] [PDF]
6. Ali Uyar, Merve Kl. 2012. Value relevance of voluntary disclosure: evidence from Turkish firms. Journal
of Intellectual Capital 13:3, 363-376. [Abstract] [Full Text] [PDF]