Corporate disclosure of human capital via LinkedIn and ownership structure. An empirical analysis of European companies
| DOI | https://doi.org/10.1108/JIC-01-2016-0016 |
| Date | 09 January 2017 |
| Pages | 102-127 |
| Published date | 09 January 2017 |
| Author | Sabrina Pisano,Luigi Lepore,Rita Lamboglia |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & Finance,Accounting/accountancy,Behavioural accounting |
Corporate disclosure of human
capital via LinkedIn and
ownership structure
An empirical analysis of European companies
Sabrina Pisano and Luigi Lepore
Department of Law, Universita degli Studi di Napoli Parthenope,
Naples, Italy, and
Rita Lamboglia
Department of Business and Economics,
Universita degli Studi di Napoli Parthenope, Naples, Italy
Abstract
Purpose –The purpose of this paper is to investigate the relationship between ownership concentration and
human capital (HC) disclosure released via LinkedIn.
Design/methodology/approach –This study uses a quantitative methodology. The sample is composed
of 150 European companies. Content analysis was used to examine HC disclosure via LinkedIn. Regression
analysis was used to test the hypothesis.
Findings –The results indicate that ownership concentration negatively influences HC disclosure via
LinkedIn, confirming that closely held firms have little motivation to voluntarily release information.
Research limitations/implications –The main limitation of thi s study relates to the sam ple size.
Furthermore, this study investigates only the quantity of HC disclosure; it does not consider the quality
of this information.
Practical implications –The typical ownership structure of European firms generates a force that opposes
the growing pressure for internationalization and global transparency. This important issue needs to be
considered in investor decisions, HC management and reporting and in setting accounting standards.
Moreover, the study points out that, despite the potential opportunities provided by LinkedIn to build and
enforce relationships with their stakeholders, companies mainly use LinkedIn for recruitment purposes.
Originality/value –This study contributes to the literature on HC disclosure because it is, to the best of the
authors’knowledge, the first study that exclusively examines HC disclosure by European companies via
LinkedIn and because it develops a disclosure index that includes items concerning the stock of knowledge
and capabilities of employees in addition to the practices in human resource management.
Keywords LinkedIn, Ownership structure, Human capital disclosure
Paper type Research paper
1. Introduction
Inthepastdecade,companieshaveincreasingly used social network sites (SNSs) to transform
their businesses and increase operating performances. In particular, SNSs have caused
significant changes in business communication and investor relations (IRs), generating relevant
changes in the methods by which companies develop dialogue and interact with stakeholders
(Bonsón and Bednárová, 2012; Coe, 2013; Hirshleifer and Teoh, 2009; Luo et al., 2013). SNSs are
internet applications based on Web 2.0 technology that allow companies to share information at
ahighrate,therebyfosteringinteractivityin communication flows (Bonsón and Bednárova,
2012; Kaplan and Haenlein, 2010). SNSs are also becoming one of the main tools to communicate
with shareholders and capital markets (Miller and Skinner, 2015; Lee et al., 2015; Luo et al., 2013).
Journal of Intellectual Capital
Vol. 18 No. 1, 2017
pp. 102-127
© Emerald PublishingLimited
1469-1930
DOI 10.1108/JIC-01-2016-0016
Received 29 January 2016
Revised 22 July 2016
1 October 2016
4 October 2016
Accepted 4 October 2016
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1469-1930.htm
This paper is the joint work of all the three Authors. Section 3 is written by the three Authors;
Sections 1 and 2.2 are by Rita Lamboglia; Sections 2.3, 4 and 5 are by Luigi Lepore; Sections 2.1 and 5
are by Sabrina Pisano.
102
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18,1
In this context, SNSs seem to represent one of the most interesting opportunity for IR,
offering companies invaluable opportunities to capture the attention of potential
shareholders, lenders and bondholders and to easily build and manage long-term
relationships with these stakeholders, thereby reducing information asymmetry
(Von Alberti-Alhtaybat and Al-Htaybat, 2016). Social media (SM) content is normally
more contagious, with a stronger social influence, than conventional online media.
Consequently, investors may respond more strongly to corporate information provided by
SM. These considerations demonstrate the potential of SNSs for IR, especially considering
the fact that social influence and information contagion are central to information diffusion
and play an important role in influencing investor responses (Hirshleifer and Teoh, 2009),
affecting corporate performance and creating value (Du and Jiang, 2015; Luo et al., 2013).
The potential role of SM is of interest to regulators and professionals. In April 2013, the
Securities and Exchange Commission (SEC) issued a report clarifying that companies may
use SM platforms to announce key information in compliance with Regulation Fair
Disclosure. According to the SEC report, SM represents an additional channel that may be
exploited to increase the reach of corporate communications to potential investors and to
enhance the engagement of existing investors and analysts (IR Society, 2013).
Regarding the content of the information, investors are particularly interested in human
capital (HC) because it is considered a key factor in the value-creation processes of
companies (Bozbura, 2004; Chen and Lin, 2003, 2004; Claver-Cortés et al., 2015; Gamerschlag,
2013; Massingham et al., 2011). Companies tend to disclose HC information to communicate
to stakeholders the link between HC and performance (Abeysekera and Guthrie, 2004) or to
reduce tension between firms and their constituents in the interest of further capital
accumulation (Abeysekera, 2008).
The present work analyses the relationship in European listed companies between
ownership concentration and HC disclosure released via LinkedIn. As per Dumay (2016), we
distinguish here in between HC reporting and HC disclosure and focus on HC disclosure,
defined as “the revelation of information that was previously secret or unknown”.
We decided to study disclosure via LinkedIn because, whereas several studies have
focussed on disclosure via Facebook and Twitter, the use of LinkedIn as a tool to disclose
information to shareholders has heretofore received little attention.
This study has two aims. The first aim is to analyse the content of HC information released
via LinkedIn by a sample of European listed companies. To achieve this aim, we developed a
disclosure index that includes items concerning the stock of knowledge and capabilities of
employees in addition to the practices in human resource management. According to
Abhayawansa and Abeysekera (2008), a low levelof HC disclosure, compared with the external
and internal capital disclosures found by previous studies, is a consequence of the framework
used to construct the disclosure indices. HC disclosure indices developed using Sveiby’s (1997)
intellectual capital (IC) tripartite consider only the stock of knowledge and capabilities of
employees and do not account for the human resource practices implemented within a
company to motivate and leverage these knowledge resources. Consequently, the authors
suggest the development of new HC disclosure indices that consider both the stock of
knowledge and the practices in human resource management involved within a firm. To the
best of our knowledge, few studies have developed such wider indices (see, e.g. Abeysekera,
2008; Abeysekera and Guthrie, 2004, 2005; Bukh et al., 2005; Li et al., 2008b; Oliveira et al., 2006).
The second aim of this study is to investigate the relationship between ownership structure
and HC disclosure via LinkedIn to understand whether the level of ownership concentration
affects the level of HC disclosure. The financial scandals that have occurred around the world
in recent years have inspired scholars to focus on the importance of deepening research into
which governance mechanisms should be implemented to ensure that interests are aligned
with risk preferences for all competing parties in firms. Ownership structure represents one of
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Corporate
disclosure
of HC
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