Determinants of online intellectual capital disclosure by Spanish local governments
| DOI | https://doi.org/10.1108/JIC-03-2020-0086 |
| Published date | 08 September 2020 |
| Date | 08 September 2020 |
| Pages | 249-289 |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & finance,Accounting/accountancy,Behavioural accounting |
| Author | Yolanda Ramírez,Ángel Tejada,María Pilar Sánchez |
Determinants of online intellectual
capital disclosure by Spanish
local governments
Yolanda Ram
ırez,
Angel Tejada and Mar
ıa Pilar S
anchez
University of Castilla-La Mancha, Albacete, Spain
Abstract
Purpose –This paper aims to investigate the extent of intellectual capital disclosure (ICD) through websites
and social media in Spanish local government (SLG) and analyze the factors that explain their disclosure.
Design/methodology/approach–The study applies content analysis and regression techniques. The ICD is
analyzed for Spanish municipalities with more than 100,000 inhabitants and provincial capitals over a period
from January 2018 to February 2020.
Findings –Findings emphasize that the quantity of disclosed information on intellectual capital (IC) is in the
low level, particularly with regard to human capital (HC). Furthermore, the results show that the information
provided via social media mainly concerns the relational capital (RC). On the other hand, results obtained
indicate that larger municipalities, with lower financial autonomy and whose citizens have a high income level
use the online media (both websites and social media) more actively to disclose information about IC. Finally,
municipalities led by women and with high level of citizens’education exert a positive influence in the ICD only
on websites.
Practicalimplications –This paper makes a number of key contributions to the existing body of knowledge,
focusingon ICD, a neglected area in the public sector accounting literature. It explores and identifies the supply-
side and demand-side determinants of information affecting the ICD in local governments. The results of this
research could be useful for policymakers, regulators and governments’managers to improve the online
information addressing ICD issues.
Originality/value –This paper adopts an innovative perspective by investigating the use of alternative tools
for ICD in local government context (websites and social media). To the best of the authors’knowledge, this is
the first study that focuses on investigating the determinants of online ICD in local governments.
Keywords Disclosure, Websites, Social media, Intellectual capital, Local government, Spain
Paper type Research paper
1. Introduction
The growing importance of the knowledge economy in public institutions has prompted
considerable debate over the identification, measurement and disclosure of intellectual
capital (IC) (Ram
ırez et al., 2011). In this regard, IC can be defined as the collection of
intangibles which allows public governments to transfer a collection of material, financial and
human resources into a system capable of creating value for the citizens.
As the objectives set in public administrations progress, the importance of intangible
elements is increasing, enabling them to be more effective and efficient, with the added-value
of being accountable to citizens and facilitating their participation in public life (Committee of
Ministers of the Council of Europe, 2001).
In the field of public management, the relationship between public administration and
citizens, understood as an agency relationship, implies a greater demand for information by
citizens and a greater need to satisfy this demand by those who govern. This relationship is
particularly strong in the area of local government, where citizens’demands for access to
more information from the administration become more intense (Fuenmayor, 2004),
especially of aspects beyond those traditionally demanded in financial statements.
This proximity with the citizen is a key element that justifies the area of our study, since, in
accordance with Bronzetti and Sicoli (2011), both the objectives of the local government, as
The extent of
ICD in Spanish
local
government
249
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1469-1930.htm
Received 10 March 2020
Revised 7 May 2020
3 July 2020
14 August 2020
Accepted 17 August 2020
Journal of Intellectual Capital
Vol. 23 No. 2, 2022
pp. 249-289
© Emerald Publishing Limited
1469-1930
DOI 10.1108/JIC-03-2020-0086
well as the resources that they use (the main resources of local governments focus on human
resources and knowledge) or even the output, services for the most part, are intangibles.
In this context of proximity to citizens, this paper aims to analyze the intellectual capital
disclosure (ICD) at the level of the local governments and which are the determinants that
condition such disclosure from the perspective of supply and demand of information. This
study is focused on websites and social media such as Twitter, Facebook and YouTube,
taking into consideration Spanish local government (SLG). We have chosen these social
networks because they are the ones generally implemented in Spanish municipalities (Criado
et al., 2017): Facebook and Twitter are present in 95.9% of the municipalities and YouTube
in 82.8%.
Analyzing the existing literature, we can observe that analysis on ICD in municipalities
are very scarce (Bronzetti and Sicoli, 2011;Del Bello, 2016;Manes et al., 2016;Schneider and
Samkin, 2008;Sciulli et al., 2002;Serrano et al., 2003), and we are not aware of any studies
analyzing the use of social media for this purpose. Based on the analyzed literature we have
selected the components of IC that are considered key in the management of local
governments.
Thus, the aim is to provide fresh insight into the factors that explain the extent of online
ICD in local governments. In order to achieve it, we have considered that Spain is an
appropriate framework to carry out the research because the socio-political context in Spain
has been marked for years by two enormous scourges –and as such they have been perceived
by the citizens –the economic crisis and the political corruption. It should be noted that this
situation has reached intolerable limits for citizens (Transparency International, 2019). In this
context, the words “information”and “transparency”have become increasingly stronger and
more relevant as the natural counterpoint to poor public management, and this is also the
reason why “good government”has crept into any need to improve the management of public
administrations. Since the concept of transparency affects a wide range of public and private
settings, there is no single definition. However, three characteristics are common to the
different concepts of transparency in the area of IC information: (1) the need for the
availability of the information in a timely manner; (2) the quality of the information disclosed,
understood as precise and relevant (Detlor et al., 2013;Justice et al., 2006) and (3) the
accessibility to the information (West, 2004).
In this context, SLG was chosen because they directly provide many of the main services
that affect the daily lives of citizens in a developed EU country, sometimes even beyond their
legal obligations. In addition, these councils have experience in improving the system for
disclosing information to citizens through participation in the assessment of transparency
indices of public institutions carried out by Transparency International Spain (https://
transparencia.org.es/en/index-of-municipalities-ita/#). From 2008 to 2017, Transparency
International has prepared transparency indexes exclusively aimed to measure the level of
transparency of local governments, through evaluation of data and information they make
available on their website regarding the indicators and areas of transparency of each index.
Finally, given the authors’knowledge of the management of SLG, it allows us to make a
critical analysis of the results obtained. The results achieved for SLG can be a reference point
for other countries interested in the dissemination of IC aimed at improving the information
provided by public administrations to citizens in aspects relating specifically to IC.
Once SLG has been selected, following the work carried out by Ram
ırez and Tejada (2019),
we have chosen the website and social network as a communication tool since through this
instrument the manager can transmit the essence of local government to the user and
convince him to trust its services (Cuozzo et al., 2017;Dumay, 2016;Dumay and Cai, 2015;
Manes et al., 2016;Pisano et al., 2017).
This choice is based on the fact that there is no obligation on the part of local
administrations to prepare a statement of non-financial information, where information on IC
JIC
23,2
250
could be included, or is such information contemplated in the annual financial reports
prepared by such institutions. Given the experience that public administrations have of
disclosing the information required by the Law 19/2013 of 9 December on transparency,
public information and good governance, through their websites, we have considered that
these sources of information are the most appropriate for analyzing ICD.
We have extended our range to social networks, and not just websites, because social
networks are Internet applications based on Web 2.0 technology that allow organizations to
share information at a high rate, thereby fostering interactivity in communication flows
(Secundo et al.,2017). While websites are well-crafted usually mono-directional
communications tools, social media platforms are better engagement (data rich) vehicles of
authentic content and citizens’interaction that may reveal more about the communication of
SLG with their wider stakeholder communities. The fast growth of Web 2.0 and social media
technology is facilitating the improvement of communication between local government and
their citizens.
Likewise, despite the critical role of IC reporting in local governments (Del Bello, 2016;
Ram
ırez, 2010;Sciulli et al., 2002), much remains to be understood about the main factors that
can affect the varying level of online ICD. In this sense, various studies have been carried out
on the factors that influence other kind of information than the one we contemplated in our
study, such as online financial information disclosure (Caba et al., 2014;C
arcaba and Garc
ıa,
2010), level of budget transparency (Harrison and Sayogo, 2014), or online sustainability
reporting by local governments (Brusca et al., 2016;Cuadrado et al., 2014;Garc
ıaet al., 2016;
Navarro et al., 2018), but, to our knowledge, none work focuses on analyzing the influence of
factors on online ICD provided by local governments.
To bring this analysisto the scientific literature and to public managers,we have applied a
content analysisof all websites and social media networks of 79 SLG in order to obtain an ICD
index. Subsequently,we have employed the ordinary least squares (OLS) regressiontechnique
to contrast empirically the factors that determine the levels of disclosure observed. The
methodology outlined above is applied to respond to the following two researchquestions:
(1) What is the extent of online ICD in SLG?
(2) Which are the potential explanatory factors influencing the extent of online ICD in
SLG?
The research has interesting findings that reveal that although the online media can be an
effective and useful tool to disclose information to the wide range of citizens involved in local
governments’activities, its use by the Spanish local councils is low, especially for those
aspects that, if published, are done on a voluntary basis. Even so, the data reflects a much
higher use of the websites than social networks to transmit this kind of information. Social
networks are especially reserved to publish aspects that directly affect citizens and that
report a positive image for political managers.
On the other hand, municipalities led by women and with a higher proportion of
population with an average level of studies disseminate a greater amount of information of IC
on websites. While, greater financial autonomy is associated with a lower level of IC
information dissemination on websites and social networks. However, no statistically
significant association between ICD and political factors is detected. Finally, the size of the
population and the wealth of the citizens are determining factors for a greater publication of
IC information in both media.
This paper contributes to the existing literature in the following ways. Firstly, it provides
an assessment of online ICD practices in SLG. Second, it provides an overall view about the
use of online media sources in SLG as an instrument to increase public information and
The extent of
ICD in Spanish
local
government
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