Purpose – The purpose of this paper is to study the extent of voluntary intellectual capital disclosers in India's emerging information, communication and technology sector and the relationship between the size of the firm and the extent of disclosures. Design/methodology/approach – Content analysis of the 30 technology, entertainment, communication and other knowledge (TecK) companies listed on the Bombay Stock Exchange is carried out. A list of intellectual capital (IC)‐related terms is searched for its presence or absence within the annual reports of these forms for the financial year 2005‐2006. The list of terms is determined based on the extensive survey of literature on content analysis and IC. Findings – The results find significantly small extent of IC disclosures in Indian firms. Information technology industries disclosures are more than any other sectors disclosures, closely followed by the telecommunication industry. Entertainment industry shows the minimal disclosures. There was no significant correlation between the occurrence of the term and the size of the firm based on its market capitalization. Research limitations/implications – The study is limited to the 30 TecK forms for one financial year. However, these firms are considered as an appropriate representative of the sector as they are knowledge and IC intensive in nature. Content analysis is well‐accepted methodology among researchers for analyzing the extent of IC disclosures; the search terminology used may be further classified or sub‐classified. Research can be extended across sectors and time period. Practical implications – Firms, policy makers and the stakeholders get a new dimension to evaluate the performance of the firms. The implication for the firms is that a new model of IC measurement and disclosures must be developed as the traditional financial reporting models may not be sufficient to disclose the IC index and the relationship between the disclosure patterns and the firm's performance. As voluntary disclosures are negligible, the implication for the policy makers is that IC disclosures made statutory in the interest of the stakeholders. Originality/value – This paper is a pioneering attempt to study the extent of IC disclosures using content analysis in the context of Indian firms.
Journal of Human Resource Costing & Accounting – Emerald Publishing
Published: Sep 26, 2008
Keywords: Intellectual capital; Information disclosure; Communication technologies; India; Intangible assets