Analysis of determinants influencing the level of intellectual capital disclosure: The case of FTSE 100 entities
Purpose: The paper deals with the issue of intellectual capital (IC) and its disclosure in the financialstatements and other parts of annual reports of FTSE 100 entities. The paper aims to identify thedeterminants that influence entities to reveal IC related information and to highlight the theoreti...
| Autores: | , |
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| Tipo de recurso: | artículo |
| Fecha de publicación: | 2023 |
| País: | España |
| Institución: | Universitat Politècnica de Catalunya (UPC) |
| Repositorio: | UPCommons. Portal del coneixement obert de la UPC |
| Idioma: | inglés |
| OAI Identifier: | oai:upcommons.upc.edu:2117/394870 |
| Acceso en línea: | https://hdl.handle.net/2117/394870 https://dx.doi.org/10.3926/ic.2213 |
| Access Level: | acceso abierto |
| Palabra clave: | Intellectual capital Intangible property Structural capital Human capital Relational capital Intangible assets Capital intel·lectual Béns immaterials Àrees temàtiques de la UPC::Economia i organització d'empreses::Gestió i direcció |
| Sumario: | Purpose: The paper deals with the issue of intellectual capital (IC) and its disclosure in the financialstatements and other parts of annual reports of FTSE 100 entities. The paper aims to identify thedeterminants that influence entities to reveal IC related information and to highlight the theoreticalaspects behind such determinants, resulting in comprehensive findings. The results of the analysis can beused to understand what leads entities to make decisions in the field of non-financial disclosure and helpin the development of the IC reporting framework.Design/methodology: The research is devoted to the analysis of the relationship between the level ofIC disclosures by companies and the analysed determinants – size, asset structure, profitability, industryand the factor of time. The dataset can be characterised as a panel data set containing 100 firms fromthe FTSE100 Index for the four most recent financial years (2018-2021). To produce a comprehensiveset of results, descriptive statistics are used, followed by regression and correlation analysis. The randomeffect method is used as it has a higher predictive power than pooled OLS and fixed effect methods inanalysing panel data.Findings: Based on the results of the analysis, it was concluded that the profitability measured as ROAis not a key factor of intellectual capital disclosure in the annual reports of FTSE 100 companies. Fromthe point of view of size, there exists a statistically significant relationship between total assets and allcomponents of IC, respectively overall IC. The analysis also showed a statistically significant impact ofthe sector in which companies operate. Particularly, companies in the service sector report moreinformation on human capital and companies in the high-tech sector report more information onstructural capital. A significant effect of asset structure was found for structural capital but only takinginto account the effect of goodwill, not through the effect of other intangible assets. Finally, the paperdemonstrated a positive and significant effect of the time factor on the level of reporting of all ICcomponents.Originality/value: This paper focuses on the determinants influencing the level of IC reporting in arepresentative sample of entities from the highly active FTSE100 Index, which provides a very recentand specific data sample from a research perspective. The paper is based on determinants that arefrequently reported in existing research, and it extends the scope by incorporating the effect ofintangible assets and goodwill as variables representing the asset structure in addition to the effect oftime. This paper presents statistically based results on the relationships between the determinants and ICbut also between the different elements of IC (human capital, structural capital and relational capital),which provide insights into the structure of reported information on intellectual capital. This insight is very substantial given that many studies ignore the characteristics of the different components of the ICas they may be affected by different determinants |
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