Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Voluntary disclosure of intellectual capital in New Zealand annual reports and the “hidden value”

Voluntary disclosure of intellectual capital in New Zealand annual reports and the “hidden value” Purpose – The paper's purpose is to describe the extent and type of voluntary disclosure of intellectual capital (IC) in New Zealand, and to test for a relationship between “hidden value” (difference between firm's market and book value), and its relationship to voluntary IC disclosure in the annual reports of New Zealand companies. The study aims to incorporate the effect of revaluations and growth expectations. Design/methodology/approach – Content analysis of 70 publicly listed New Zealand firms, and database retrieval of independent variable data. Correlation and regression analysis is undertaken. Findings – Only revaluing firms show a significant positive relationship between their levels of hidden value and their voluntary disclosure of IC and its components of external and internal structure. Explanatory power is increased when an interaction term involving hidden value and growth expectations is introduced. Research limitations/implications – Further developments in the growth expectation and market value measures are suggested. A need for qualitative interviews is identified in order to further develop theoretical explanation of the observed relationship. Practical implications – This paper may help external users assess levels of IC in revaluing firms. Originality/value – The study extends the work of Brennan by increasing the sample size, quantitatively recognising the impact of revaluations and growth expectations, providing a discussion of the theoretical underpinnings for the proposed relationships, and by utilising reliability testing in the content‐analysis process, several measures of hidden value and IC disclosure, and statistical testing. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Human Resource Costing & Accounting Emerald Publishing

Voluntary disclosure of intellectual capital in New Zealand annual reports and the “hidden value”

Download PDF
25 pages

Loading next page...
 
/lp/emerald-publishing/voluntary-disclosure-of-intellectual-capital-in-new-zealand-annual-84QTS6jffJ
Publisher
Emerald Publishing
Copyright
Copyright © 2008 Emerald Group Publishing Limited. All rights reserved.
ISSN
1401-338X
DOI
10.1108/14013380810872725
Publisher site
See Article on Publisher Site

Abstract

Purpose – The paper's purpose is to describe the extent and type of voluntary disclosure of intellectual capital (IC) in New Zealand, and to test for a relationship between “hidden value” (difference between firm's market and book value), and its relationship to voluntary IC disclosure in the annual reports of New Zealand companies. The study aims to incorporate the effect of revaluations and growth expectations. Design/methodology/approach – Content analysis of 70 publicly listed New Zealand firms, and database retrieval of independent variable data. Correlation and regression analysis is undertaken. Findings – Only revaluing firms show a significant positive relationship between their levels of hidden value and their voluntary disclosure of IC and its components of external and internal structure. Explanatory power is increased when an interaction term involving hidden value and growth expectations is introduced. Research limitations/implications – Further developments in the growth expectation and market value measures are suggested. A need for qualitative interviews is identified in order to further develop theoretical explanation of the observed relationship. Practical implications – This paper may help external users assess levels of IC in revaluing firms. Originality/value – The study extends the work of Brennan by increasing the sample size, quantitatively recognising the impact of revaluations and growth expectations, providing a discussion of the theoretical underpinnings for the proposed relationships, and by utilising reliability testing in the content‐analysis process, several measures of hidden value and IC disclosure, and statistical testing.

Journal

Journal of Human Resource Costing & Accounting – Emerald Publishing

Published: Apr 4, 2008

Keywords: Intellectual capital; Disclosure; Market value; New Zealand

References

  • Intellectual capital disclosure and market capitalization
    Abdolmohammadi, M.J.
  • An empirical investigation of annual reporting trends of intellectual capital in Sri Lanka
    Abeysekera, I.; Guthrie, J.
  • IC measurement and reporting: establishing a practice in SA mining
    April, K.A.; Bosma, P.; Deglon, D.A.
  • Voluntary Annual Report Disclosures: What Users Want
    Beattie, V.; Pratt, K.
  • The stock market and investment in the new economy: some tangible facts and intangible fictions
    Bond, S.R.; Cummins, J.G.
  • Intellectual capital disclosures in Canadian corporations
    Bontis, N.
  • The measurement of intellectual capital
    Booth, R.
  • Disclosure level and the cost of equity capital
    Botosan, C.A.
  • Italian annual intellectual capital disclosure
    Bozzolan, S.; Favotto, F.; Ricceri, F.
  • Building a bright future
    Bradford, M.
  • Reporting intellectual capital in annual reports: evidence from Ireland
    Brennan, N.
  • The relevance of intellectual capital disclosure: a paradox?
    Bukh, P.N.
  • Research and knowledge interaction: guidelines for intellectual capital reporting
    Bukh, P.N.; Johanson, U.
  • Legitimacy theory or managerial reality construction? Corporate social disclosure in Marks & Spencer Plc corporate reports, 1969‐1997
    Campbell, D.J.
  • An empirical investigation of the relationship between intellectual capital and firms' market value and financial performance
    Chen, M‐C.; Cheng, S‐J.; Hwang, Y.
  • A stakeholder framework for analysing and evaluating corporate social performance
    Clarkson, M.B.E.
  • SPSS Analysis without Anguish
    Coakes, S.J.; Stead, L.G.
  • Permanent and transitory components of GNP and stock prices
    Cochrane, J.
  • Voluntary disclosure by Swedish companies
    Cooke, T.E.
  • Financial Accounting Theory
    Deegan, C.
  • Assessing the risk of ideas
    Dzinkowski, R.
  • The Value Reporting Revolution: Moving beyond the Earnings Game
    Eccles, R.G.; Herz, R.H.; Keegan, E.M.; Phillips, D.M.H.
  • Some perspectives on intangibles and intellectual capital 2000
    Edvinsson, L.
  • Intellectual Capital: The Proven Way to Establish Your Company's Real Value by Measuring Its Hidden Brainpower
    Edvinsson, L.; Malone, M.S.
  • The Management of Intellectual Capital and Its Implications for Business Reporting
    Fincham, R.; Roslender, R.
  • Intellectual capital and traditional measures of corporate performance
    Firer, W.; Williams, S.
  • Disclosing intellectual capital in company annual reports: evidence from Malaysia
    Goh, P.C.; Lim, K.P.
  • Accounting and Accountability: Changes in Corporate Social and Environmental Reporting
    Gray, R.; Owen, D.; Adams, C.
  • Intangible assets, information complexity, and analysts' earnings
    Gu, F.; Wang, W.
  • Intellectual capital: Australian annual reporting practices
    Guthrie, J.; Petty, R.
  • The voluntary reporting of intellectual capital. Comparing evidence from Hong Kong and Australia
    Guthrie, J.; Petty, R.; Ricceri, F.
  • Using content analysis as a research method to inquire into intellectual capital reporting
    Guthrie, J.; Petty, R.; Yongvanich, K.; Ricceri, F.
  • Struggling to understand the stock market
    Hall, R.E.
  • Stock performance and intermediation changes surrounding sustained increases in disclosure
    Healy, P.M.; Hutton, A.P.; Palepu, K.
  • Financial institutions, intangibles, and corporate governance
    Holland, J.B.
  • Strategy Maps: Converting Intangible Assets into Tangible Outcomes
    Kaplan, R.S.; Norton, D.P.
  • Content Analysis: An Introduction to Its Methodology
    Krippendorff, K.
  • Voluntary disclosure and equity offerings: reducing information asymmetry or hyping the stock?
    Lang, M.H.; Lundholm, R.J.
  • Intangibles. Management, Measurement, and Reporting
    Lev, B.
  • Remarks on the measurement, valuation, and reporting of intangible assets
    Lev, B.
  • To the public listed companies, from the investment community
    Lim, L.; Dallimore, P.
  • Exploring the reliability of social and environmental disclosures content analysis
    Milne, M.J.; Adler, R.W.
  • Reporting on intellectual capital: why, what and how?
    Mouritsen, J.; Bukh, P.N.; Marr, B.
  • Valuing the future: intellectual capital supplements at Skandia
    Mouritsen, J.; Larsen, H.T.; Bukh, P.N.
  • The knowledge economy‐foreward
    Norris, R.
  • Firm‐specific determinants of intangibles reporting: evidence from the Portuguese stock market
    Oliveira, L.; Rodrigues, L.L.; Craig, R.
  • Annual reporting practices: information about human resources in corporate annual reports in major Swedish companies
    Olsson, B.
  • Intellectual capital literature review: measurement, reporting and management
    Petty, R.; Guthrie, J.
  • Intellectual capital and firm performance of US multinational firms: a study of the resource‐based and stakeholder views
    Riahi‐Belkaoui, A.
  • Intellectual Capital
    Roos, J.; Roos, G.; Dragonetti, N.C.; Edvinsson, L.
  • Intellectual capital reporting in the UK: a field study perspective
    Roslender, R.; Fincham, R.
  • Human capital indicators, business performance and market‐to‐book ratio
    Sáenz, J.
  • Intellectual capital reporting: an examination of local government in Victoria
    Sciulli, N.; Wise, V.; Demediuk, P.; Sims, R.
  • The New Organisational Wealth: Managing and Measuring Knowledge Based Assets
    Sveiby, K‐E.
  • Intellectual capital: thinking ahead
    Sveiby, K‐E.
  • Intellectual capital: disentangling an enigmatic concept
    Swart, J.
  • Intellectual capital disclosure in The Netherlands, Sweden and the UK. A longitudinal and comparative study
    Vandemaele, S.N.; Vergauwen, P.G.M.C.; Smits, A.J.
  • Reporting on intellectual capital
    van der Meer‐Kooistra, J.; Zijlstra, S.M.
  • Annual report IC disclosures in The Netherlands, France and Germany
    Vergauwen, P.G.M.C.; van Alem, F.J.C.
  • Intellectual Capital. Measuring the Immeasurable?
    Wall, A.; Kirk, R.; Martin, G.
  • Is a companys intellectual capital performance and intellectual capital disclosure practices related? Evidence from publicly listed companies from the FTSE 100
    Williams, S.M.
  • Is intellectual capital performance and disclosure practices related?
    Williams, S.M.
  • Intellectual capital disclosure: New Zealand evidence
    Wong, M.; Gardner, C.T.
  • Intangibles and intellectual capital: an overview of the reporting issues and some measurement models
    Zambon, S.
  • Intangible assets and stock trading strategies
    Zhang, D.