Intellectual capital disclosure from sell‐side analyst perspective
| Pages | 294-306 |
| Published date | 17 April 2009 |
| DOI | https://doi.org/10.1108/14691930910952678 |
| Date | 17 April 2009 |
| Author | Subhash Abhayawansa,Indra Abeysekera |
| Subject Matter | Accounting & finance,HR & organizational behaviour,Information & knowledge management |
Intellectual capital disclosure
from sell-side analyst perspective
Subhash Abhayawansa
Faculty of Business and Enterprise, Swinburne University of Technology,
Hawthorn, Australia, and
Indra Abeysekera
School of Accounting and Finance,
University of Wollongong, Wollongong, Australia
Abstract
Purpose – Research on the use/disclosure of intellectual capital (IC) information by sell-side analysts,
using content analysis of their reports, is growing. This paper aims to establish the importance of this
perspective in understanding the role of IC in communicating firm value, to introduce possible
theoretical frameworks to interpret the findings of such studies, and to propose methodological
developments.
Design/methodology/approach – The paper argues for the need to look at IC from the perspective
of sell-side analysts, and then advocates the use of several theoretical frameworks to enrich current
understanding of the role of IC as it is used/disclosed by sell-side analysts. Current methodologies used
in this type of research are critiqued with a view to proposing multiple research methods.
Findings – Looking at IC from the sell-side analyst perspective helps us to understand how the
capital market appreciates this information. However, IC information that analysts disclose cannot be
taken at its face value. Issues of signalling, analysts’ incentives/influences, political economy view and
globalisation are introduced as providing theoretical frameworks for explaining IC disclosure in
sell-side analysts’ reports. To obtain a richer picture of the role of IC information in analysts’ decision
processes, multiple research methods are proposed.
Practical implications – The proposals in this paper may inform and guide future research on IC
information use/disclosure by sell-side analysts with theoretical underpinnings and methodological
rigour.
Originality/value – This paper is the first attempt to propose possible theories for interpreting
findings of studies on IC use/discsloure by sell-side analysts and suggest multiple research
methodologies in this type of research.
Keywords Value analysis,Content management, Intellectualcapital, Information disclosure
Paper type Conceptual paper
1. Introduction
Changes in the business environment from the industrial era to the new economy have
transformed the corporate value-creation process and strategy, particularly for firms in
non-traditional industries (Lev and Zarowin, 1999). The potential for creating
competitive advantage and long-term corporate value now lies more importantly in
effective management of intangibles or intellectual capital (IC[1]) than in tangible
assets. In keeping with the changes in the corporate value-creation process, traditional
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1469-1930.htm
The authors wish to acknowledge helpful comments of Professor James Guthrie on an earlier
version of this paper. Also, the authors have been assisted by comments of participants when
this paper was presented at the 2007 AFAANZ Conference, Queensland, Australia.
JIC
10,2
294
Journal of Intellectual Capital
Vol. 10 No. 2, 2009
pp. 294-306
qEmerald Group Publishing Limited
1469-1930
DOI 10.1108/14691930910952678
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