The determinants of intellectual capital disclosure: a meta-analysis review
| DOI | https://doi.org/10.1108/JABS-03-2015-0028 |
| Published date | 03 August 2015 |
| Pages | 232-250 |
| Date | 03 August 2015 |
| Author | Chaabane Oussama Houssem Eddine,Shamsul Nahar Abdullah,Fatima Abdul Hamid,Dewan Mahboob Hossain |
| Subject Matter | Strategy,International business |
The determinants of intellectual capital
disclosure: a meta-analysis review
Chaabane Oussama Houssem Eddine, Shamsul Nahar Abdullah, Fatima Abdul Hamid
and Dewan Mahboob Hossain
Chaabane Oussama
Houssem Eddine,
Shamsul Nahar Abdullah,
Fatima Abdul Hamid and
Dewan Mahboob Hossain
are all at the Department
of Accounting,
International Islamic
University Malaysia,
Kuala Lumpur, Malaysia.
Abstract
Purpose –The study aims to examine the relationship between the corporate disclosure on intellectual
capital and five firm characteristics, namely, size, leverage, profitability, age and industry type.
Design/methodology/approach –The research uses a meta-analysis technique by taking 19 articles
published between 2003 and 2013. Thus, this study integrates and accumulates the findings of prior
studies.
Findings –The research finds a significant relationship between intellectual capital disclosure (ICD)
and the independent variables: size, profitability and industry.
Originality/value –This study provides a systematic overview of the determinants of ICD by using a
meta-analysis approach. A systematic analysis is currently lacking in the ICD literature; hence, this
study attempts to resolve the mixed findings of prior studies.
Keywords Intellectual capital, Meta-analysis, Disclosure
Paper type Research paper
1. Introduction
Intellectual capital (IC) has grown prominent as the hidden value in today’s businesses. It
is an intangible asset comprising the knowledge, skills and values contributed by the
company’s workforce (human capital), the internal structure within the company (internal
capital) as well as the connections and networks (external capital) that the company has
(Bukowitz and Petrash, 1997;Alipour, 2012;Wagiciengo and Belal, 2012;). As IC provides
added value and competitive advantage to a company, it is disclosed to stakeholders in the
company’s annual reports. This disclosure, which is often voluntary, is intellectual capital
disclosure (ICD). Several previous studies conducted in developed countries (Italy, Hong
Kong, the UK, Australia) and developing countries (Malaysia, Bangladesh, Mexico)[1] have
discovered certain firm characteristics (size, profitability, leverage, industry type and age)
to be determinants of ICD (Bozzolan et al., 2003;Cerbioni and Perbonetti, 2007;Yau et al.,
2009;Whiting and Woodcock, 2011;El-Bannany, 2013). Subsequently, the objective of this
article is to provide a meta-analysis review of the determinants of the ICD by companies.
This is because the empirical results of prior studies were mixed and sometimes
contradictory. For instance, Petty and Cuganesan (2005) found size to be positively
associated with voluntary ICD in Hong Kong, but Bozzolan et al. (2003) did not find a
significant association in Italy. Similarly, Nurunnabi et al. (2011) found industry type to
influence ICD in Bangladesh; however, Branco et al. (2011) only found it to partially explain
ICD of Portuguese companies. In Malaysia, Ousama et al. (2012) provide evidence of
profitability as a determinant of ICD, whereas Taliyang et al. (2011) did not find it to be
significant.
Due to the contradictory results above, this study uses a meta-analytic review of the
determinants of ICD. Although several definitions of meta-analysis have been provided by
previous studies (Glass, 1976;Ahmed and Courtis, 1999;Khlif and Souissi, 2010 and
Received 9 March 2015
Revised 3 May 2015
Accepted 5 May 2015
PAGE 232 JOURNAL OF ASIA BUSINESS STUDIES VOL. 9 NO. 3, 2015, pp. 232-250, © Emerald Group Publishing Limited, ISSN 1558-7894 DOI 10.1108/JABS-03-2015-0028
Pigott, 2012), the following best explains this approach: meta-analysis is a “statistical
analysis of a large collection of results from individual studies, for the purpose of
cumulating and integrating the findings” (Glass, 1976, p. 3) to identify the reasons behind
the different findings (Ahmed and Courtis, 1999;Khlif and Souissi, 2010). This study used
the meta-analysis process proposed by Hunter et al. (1982) to better clarify the
determinants of ICD. This paper uses 19 published papers between 2003 and 2013 for this
analysis. This study concentrates on five firm characteristics as explanatory variables of
ICD. They are: size, leverage, profitability, industry type and age. In general, the findings
show that size, industry and profitability are determinants of ICD, whereas age and
leverage are not.
Although meta-analysis is a widely used technique in the social science research, there is
a dearth of this kind of research in the field of accounting (Trotman and Wood, 1991;
Borkowski, 1996;Ahmed and Courtis, 1999;Khlif and Souissi, 2010;Habib, 2013). To date,
no study has applied meta-analysis in relation to the determinants of ICD. This study fills
this research gap and adds to the limited meta-analysis literature in accounting. Using the
meta-analysis technique is timely because less than a decade ago there was limited
literature on the determinants of ICD. However, over the recent few years, this area of
research has accumulated ample number of studies, with the relevant data, to enable this
technique to be performed. More importantly, as mentioned above, the findings of these
studies are mixed. This warrants a technique which would allow the findings of prior
literature to be integrated so as to possibly clarify the reasons for the varying results.
Furthermore, the meta-analysis sub-groupings of “developed countries” and “developing
countries” permits this study to analyze ICD determinants under differing economic
conditions and determine their consistency. The results based on the sub-groupings would
facilitate a better understanding of the ICD determinants literature. Therefore, the findings
of this study would be useful to researchers interested in this area of research, as it can
form a basis for further improvement. Moreover, the use of new and relevant techniques is
crucial to the development of accounting research. Thus, this study may not only be
beneficial to researchers in this area, but could also be a reference to those who intend to
apply this technique to their respective research areas. The rest of the paper is structured
as follows. The findings of the previous empirical studies on the determinants of ICD are
presented in Section 2 along with the gap in the literature. Section 3 includes a description
of the meta-analysis technique and methodology and the samples. In Section 4, the
empirical results of the meta-analysis are presented. The conclusion is drawn in Section 5.
2. Prior research
Studies on ICD were conducted from different contexts. For example, some researchers
focused only on the extent and the trend of different IC components (Haji and Mubaraq,
2012;Haji and Ghazali, 2013). Some others conducted comparative studies on the extent
of ICD among countries (Guthrie et al., 2006;Vergauwen and Alem, 2005), while others
concentrated on the determinants of ICD (Bozzolan et al., 2003;Cerbioni and Perbonetti,
2007;Yau et al., 2009;Whiting and Woodcock, 2011). In most of the above studies, the
extent of ICD is measured using an index of IC items. Each item on the index, which is
disclosed, is given a score of “1”. If there is non-disclosure, “0” is scored for that item. Then,
the score is aggregated to attain total ICD for each company.
Even though prior studies have looked into ICD from different angles, this study reviews
only the studies that empirically investigated the determinants of ICD to be consistent with
its objective. Thus, this section is organized as follows: the findings of prior studies related
to size, leverage, profitability, age and industry types.
2.1 Size
Different empirical studies have varied results in terms of the association between size and
ICD. Studies like Ousama et al. (2012),Ferreira et al. (2012) and Taliyang et al. (2011) found
VOL. 9 NO. 3 2015 JOURNAL OF ASIA BUSINESS STUDIES PAGE 233
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