The effects of business ethics and corporate social responsibility on intellectual capital voluntary disclosure
| DOI | https://doi.org/10.1108/JIC-08-2020-0287 |
| Pages | 1-23 |
| Date | 09 March 2021 |
| Published date | 09 March 2021 |
| Subject Matter | Information & knowledge management,Knowledge management,HR & organizational behaviour,Organizational structure/dynamics,Accounting & finance,Accounting/accountancy,Behavioural accounting |
| Author | Matteo Rossi,Giuseppe Festa,Salim Chouaibi,Monica Fait,Armando Papa |
The effects of business ethics and
corporate social responsibility on
intellectual capital
voluntary disclosure
Matteo Rossi
Department of Law Economics Management and Quantitative Methods,
University of Sannio, Benevento, Italy and
Wyzsza Szkola Bankowa w Poznaniu, Poznan, Poland
Giuseppe Festa
Department of Economics and Statistics, University of Salerno, Fisciano, Italy
Salim Chouaibi
Faculty of Economic Sciences and Management, University of Sfax, Sfax, Tunisia
Monica Fait
Department of Management, Economics, Mathematics and Statistics,
University of Salento, Lecce, Italy, and
Armando Papa
Faculty of Communication Sciences, University of Teramo, Rome, Italy and
Higher School of Economics, National Research University, Moscow, Russia
Abstract
Purpose –This study aims to examine the potential effect that business ethics (BE) in general and corporate
social responsibility (CSR) more specifically can exert on the voluntary disclosure (VD) of intellectual capital
(IC) for the ethically most engaged firms in the world.
Design/methodology/approach –The research design is based on an inductive approach. As part of the
global quantitative investigation, the authors have analyzed the impact of BE and CSR on the transparent
communication of the IC. The data under analysis have been investigated using multiple linear regression.
Findings –Based on a sample of 83 enterprises emerging as the most ethical companies in the world, the
results have revealed that the adoption of ethical and socially responsible approach is positively associated
with the extent of VD about IC. This finding may help attenuating the asymmetry of information and the
conflict of interest potentially arising with corporate partners. Hence, IC-VD may stand as an evidence of ethical
and socially responsible behaviors.
Practical implications –Global and national regulators and policymakers can be involved by these results
when setting social reporting standards because they suggest that institutional and/or cultural factors affect
top management’s social reporting behavior in the publication of the IC information.
Social implications –Direct and indirect stakeholders, if supported by ethical and socially responsible
behaviors of the company, could assess more in detail the quality of the disclosed information concerning
the IC.
Effects of
business ethics
1
© Matteo Rossi, Giuseppe Festa, Salim Chouaibi, Monica Fait and Armando Papa. Published by
Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY
4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for
both commercial and non-commercial purposes), subject to full attribution to the original publication
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legalcode
The article is based on the study funded by the Basic Research Program of the National Research
University Higher School of Economics (HSE) and by the Russian Academic Excellence Project “5-100”.
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 27 August 2020
Revised 13 January 2021
Accepted 18 January 2021
Journal of Intellectual Capital
Vol. 22 No. 7, 2021
pp. 1-23
Emerald Publishing Limited
1469-1930
DOI 10.1108/JIC-08-2020-0287
Originality/value –Most of the studies that have beenconducted in this field have examined the effect of BE
and CSR on the firm’s overall transparency, neglecting their potential effect on IC disclosure. This study is
designed to fill in this gap through testing the impact of ethical and socially responsible approaches specifically
on IC-VD.
Keywords Business ethics, Corporate social responsibility, Voluntary disclosure, Intellectual capital,
Transparency, Fair value
Paper type Research paper
1. Introduction
Over the last few decades, firms have been generating value not only from securities and
financials but also from other intangible elements, such as skills of employees (human
capital), novelty in technology (structural capital), relationships with customers (direct
relational capital) and reputation on the market (indirect relational capital or social capital), all
forms of potential intellectual capital (IC), whose contribution, however, is probably riskier
than industrial assets (Su, 2014;Cruz-Gonz
alez et al., 2014). In fact, the impact of IC on the
business results is uncertain, and in addition, it is often more difficult to identify and measure
its characteristics (Murray et al., 2016).
The uncertainty about its representation and measurement still poses issues related to
accounting, evaluation and governance (Hussi, 2004;Guthrie et al., 2006;Hamed and Omri,
2014). To limit these problems, managers may choose voluntary disclosure (VD) to reduce the
asymmetry of the information (Branco and Rodrigues, 2008).
IC is a driving factor and creator of lasting value (Lin et al., 2015;Vaz et al., 2019), and
disclosure by applying ethical and social principles improves the trust of information and
reduces the conflict of interest (Alves et al., 2012;Chung et al., 2015;Al Maskati and Hamdan,
2017). These behaviors may exert a positive effect on the global quality of the IC-VD (Melloni,
2015), and in this study, more specifically, VD of nonfinancial information about IC are
assumed to be positively influenced by ethical and socially responsible behaviors of the
company’s decision-makers (Corvino et al., 2019).
In this respect, interest in the development of business ethics (BE) and corporate social
responsibility (CSR) in accounting, evaluation and management has gained increasing
attention in the academic literature (Nahapiet and Ghoshal, 1998), and the last 20 years (or
even more) of empirical research on these issues have generated vast literature (Gray et al.,
1995;Chen and Gavious, 2015;Singh and Gaur, 2020). Accordingly, the quality of the
information published by companies about their IC has received an ever more peculiar
interest in managerial research (Ousama and Fatima, 2012;Muttakin et al., 2015;Devalle et al.,
2016;Bellucci et al., 2020), with specific concerns about the effect of BE and CSR on the quality
of the disclosed information on voluntary or mandatory basis, also considering several
financial scandals that have added doubts about relevance and reliability of some company
data (Lehnert et al., 2016).
Subsequently, a critical question is the following: is it adequate, opportune and reliable to
take into consideration only the accounting information that mandatorily concern IC,
especially considering that this entity is so difficult to identify and measure? This issue seems
deserving huge attention particularly in the current context, constantly and continuously
marked by the rise of BE and CSR, with consequent effect also on the relevance of the quality
of the disclosed information.
For example, the legitimacy theory provides some contributions regarding environmental
reputation, and the related effect of VD on reputational capital (Alvino et al., 2020). In this
respect, the reputation of the company is a social construct stemming from the process of
legitimization (Bond et al., 2016).
However, empirical studies investigating the effect of BE and CSR on VD have proved
mixed results, mostly because of the different meaning about ethics and responsibility in each
JIC
22,7
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