Ownership composition and intellectual capital disclosure: Indonesia as a case study
-
DOIhttp://dx.doi.org/10.21511/imfi.18(2).2021.04
-
Article InfoVolume 18 2021, Issue #2, pp. 37-47
- Cited by
- 1050 Views
-
535 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
This study explores whether ownership structure (comprising ownership concentration, foreign, managerial, and institutional ownership) affects intellectual capital disclosure (ICD) in Southeast Asia’s largest stock market and Indonesia’s emerging economy. The sample includes 323 public firms listed on the Indonesia Stock Exchange (IDX) from seven industries between 2008 and 2017, or 2,634 firm-year observations. Data were analyzed using the ordinary least squares (OLS) regression with robust standard errors. The results show that ICD is positively related to ownership concentration. A negative and substantial relationship was found for both foreign and managerial ownerships, while the institutional ownership variable had a negative and insignificant impact. Overall, the results show robust conclusions regarding the impact of the ownership structure on ICD. The findings of this investigation could be taken into account by capital market authorities such as the Indonesia Stock Exchange (IDX) to raise awareness of intellectual capital and improve ICD practices.
Acknowledgment
The researchers are grateful for the valuable responses from two unnamed reviewers and discussion respondents at Mulawarman University. We also thank the Indonesia Stock Exchanges (IDX) and The Indonesia Capital Market Institute for providing the annual report.
- Keywords
-
JEL Classification (Paper profile tab)E44, M13, O34
-
References34
-
Tables7
-
Figures0
-
- Table 1. Sample firms by industry
- Table 2. Intellectual capital disclosure checklist
- Table 3. Descriptive statistics
- Table 4. Correlation matrix
- Table 5. Impact of ownership structure on intellectual capital disclosure
- Table 6. Impact of ownership structure on intellectual capital disclosure: high vs low
- Table 7. Impact of ownership structure on different categories of intellectual capital disclosure
-
- Abeysekera, I. (2010). The Influence of Board Size on Intellectual Capital Disclosure by Kenyan Listed Firms. Journal of Intellectual Capital, 11(4), 504-518.
- Al-Akra, M., Eddie, I. A., & Ali, M. J. (2010). The Influence of The Introduction of Accounting Disclosure Regulation on Mandatory disclosure Compliance: Evidence from Jordan. The British Accounting Review, 42(3), 170-186.
- Alfraih, M. M. (2018). The role of corporate governance in intellectual capital disclosure. International Journal of Ethics and Systems, 34(1), 101-121.
- Barako, D. G., Hancock, P., & Izan, H. Y. (2006). Factors Influencing Voluntary Corporate Disclosure By Kenyan Companies. Corporate Governance an International Review, 14(2), 107-125.
- Barros, Carlos P. Boubaker, Sabri, & Hamrouni. (2013). Corporate Governance and Voluntary Disclosure in France. The Journal of Applied Business Research, 29(2), 561-577.
- Boubakri, N., Cosset, J. C., & Guedhami, O. (2005). Liberalization, corporate governance and the performance of privatized firms in developing countries. Journal of Corporate Finance, 11(5), 767-790.
- Brown, J. David., Earle, John S., & Telegdy, Almos. (2004). Does Privatization Raise Productivity? Evidence from Comprehensive Panel Data on Manufacturing Firms in Hungary, Romania, Russia, and Ukraine (November 2004) (W.E. Upjohn Institute Staff Working Paper No. 04-107).
- Brüggen, A., Vergauwen, P., & Dao, M. (2009). Determinants of Intellectual Capital Disclosure: Evidence From Australia. Management Decision, 47(2), 233-245.
- Cerbioni, F., & Parbonetti, A. (2007). Exploring the Effects of Corporate Governance on Intellectual Capital Disclosure: An Analysis of European Biotechnology Companies. European Accounting Review, 16(4), 791-826.
- Cheng, E. C. M., & Courtenay, S. M. (2006). Board Composition, Regulatory Regime and Voluntary Disclosure. The International Journal of Accounting, 41(3), 262-289.
- Craswell, A., & Taylor, S. (1992). Discretionary Disclosure of Reserves by Oil and Gas Companies: An Economic Analysis. Journal of Business Finance and Accounting, 19(2), 295-308.
- Eng, L. L., & Mak, Y. T. (2003). Corporate Governance and Voluntary Disclosure. Journal of Accounting and Public Policy, 22(4), 325-345.
- Fama, E. F., & Jensen, M. C. (1983). Separation of Ownership and Control. The Journal of Law and Economics, 26(2), 301-325.
- Ferreira, A. L., Branco, M. C., & Moreira, J. A. (2012). Factors Influencing Intellectual Capital Disclosure by Portuguese Companies. International Journal of Accounting and Financial Reporting, 2(2), 278.
- García-Meca, E., & Sánchez-Ballesta, J. P. (2010). The Association of Board Independence and Ownership Concentration with Voluntary Disclosure: A Meta-Analysis. European Accounting Review, 19(32), 603-627.
- Haniffa, R. M., & Cooke, T. E. (2002). Culture, Corporate Governance and Disclosure in Malaysian Corporations. ABACUS, 38(3), 317-349.
- Hidalgo, R. L., Garcia-Meca, E., & Martinez, I. (2011). Corporate Governance and Intellectual Capital Disclosure. Journal of Business Ethics, 100(3), 483-495.
- Jensen, M. C., & Meckling, W. H. (1976). Theory of The Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics, 3(4), 305-360.
- Kennedy P (2008). A Guide to Econometrics. Malden, Massachusetts: Blackwell Publishing.
- Khan, A., Muttakin, M. B., & Siddiqui, J. (2013). Corporate Governance and Corporate Social Responsibility Disclosures: Evidence from an Emerging Economy. Journal of Business Ethics, 114, 207-223.
- Lakhal, F. (2005). Voluntary Earnings Disclosures and Corporate Governance: Evidence from France. Review of Accounting and Finance, 4(3), 64-85.
- Li, J., Pike, R., & Haniffa, R. (2008). Intellectual Capital Disclosure and Corporate Governance Structure in UK Firms. Accounting and Business Research, 38(2), 37-41.
- Mangena, M., & Pike, R. (2005). The Effect of Audit Committee Shareholding, Financial Expertise and Size on Interim Financial Disclosures. Accounting and Business Research, 35(4), 327-349.
- Martins, M. M., Morais, A. I., Isidro, H., & Laureano, R. (2016). Intellectual Capital Disclosure: The Portuguese Case. Journal of The Knowledge Economy, 9(4l), 1224-1245.
- Mckinnon, J. L., & Dalimunthe, L. (1993). Voluntary Disclosure of Segment Information by Australian Divesified Companies. Accounting and Finance, 33(1), 33-50.
- Muttakin, M. B., Khan, A., & Belal, A. R. (2015). Intellectual Capital Disclosures and Corporate Governance: An Empirical Examination. Advances in Accounting, 31(2), 219-227.
- Nadeem, M. (2020). Does board gender diversity influence voluntary disclosure of intellectual capital in initial public offering prospectuses? Evidence from China. Corporate Governance: An International Review, 28(2), 100-118.
- Naser, K., Al-Khatib, K., & Karbhari, Y. (2002). Empirical evidence on the depth of corporate information disclosure in developing countries. International Journal of Commerce and Management, 12(3/4), 122-155.
- Oliveira, L., Lima Rodrigues, L., & Craig, R. (2006). Firm-specific Determinants of Intangibles Reporting: Evidence from the Portuguese Stock Market. Journal of Human Resource Costing and Accounting, 10(1), 11-33.
- Prencipe, A. (2004). Proprietary Costs and Determinants of Voluntary Segment Disclosure: Evidence from Italian Listed Companies. European Accounting Review, 13(2), 319-340.
- Shleifer, A., & Vishny, R. (1986). Large Shareholders and Corporate Control. Journal of Political Economy, 94(3), 458-461.
- Tejedo-Romero, F., Rodrigues, L. L., & Craig, R. (2017). Women directors and disclosure of intellectual capital information. European Research on Management and Business Economics, 23(3), 123-131.
- Vergauwen, P. G. M. C., & Van Alem, F. J. C. (2005). Annual Report IC Disclosures in The Netherlands, France And Germany. Journal of Intellectual Capital, 6(1), 89-104.
- Wooldridge, J. M. (2009). Introductory Econometrics: A Modern Approach (5th ed.). South-Western Cengage Learning, Mason.