A measurement scale for assessing intellectual capital disclosure
Orientation: Intellectual capital disclosure (ICD) including structural capital (SC), human capital (HC), and relational capital (RC) of non-financial information creates a shareholder value. Conflicting evidence on this voluntary disclosure suggests the need to develop an ICD measurement scale for...
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| Format: | Article |
| Language: | English |
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AOSIS
2021-12-01
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| Series: | SA Journal of Human Resource Management |
| Subjects: | |
| Online Access: | https://sajhrm.co.za/index.php/sajhrm/article/view/1645 |
| _version_ | 1817981258721918976 |
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| author | Mpho D. Magau Gerhard Roodt Gerhardus van Zyl |
| author_facet | Mpho D. Magau Gerhard Roodt Gerhardus van Zyl |
| author_sort | Mpho D. Magau |
| collection | DOAJ |
| description | Orientation: Intellectual capital disclosure (ICD) including structural capital (SC), human capital (HC), and relational capital (RC) of non-financial information creates a shareholder value. Conflicting evidence on this voluntary disclosure suggests the need to develop an ICD measurement scale for reducing information asymmetry in the annual financial reporting.
Research purpose: The main aim of this study was to develop a multi-dimensional measurement scale consisting of groups of items for critically examining the extent of ICD in the corporate annual reports or integrated reports to build investor confidence.
Motivation for the study: The lack of voluntary disclosure on intellectual capital (IC) increases information asymmetry and negatively affects investor decision-making. An ICD measurement scale is expected to facilitate the reliable extraction of non-financial information from the annual reports or integrated reports.
Research approach/design and method: A quantitative cross-sectional study was used with an ICD measurement scale for extracting information from 150 annual reports of the Johannesburg Stock Exchange (JSE) listed companies. The measurement scale was subjected to exploratory factor analysis (EFA).
Main findings: The ICD measurement scale yielded one factor structures across all three dimensions with internal reliability statistics (Cronbach alphas) of SC (0.849), HC (0.806) and RC (0.749), after the second level factor analysis.
Practical/managerial implications: The ICD measurement scale will enable the market participants to understand how non-financial information can be extracted reliably from the annual reports and use to assess the value of intangible assets.
Contribution/value-add: The novel contribution of the study is the construction of a measurement scale for assessing ICD. |
| first_indexed | 2024-04-13T23:03:32Z |
| format | Article |
| id | doaj.art-f9b507c8888a45bd99aa1d3a3c00620c |
| institution | Directory Open Access Journal |
| issn | 1683-7584 2071-078X |
| language | English |
| last_indexed | 2024-04-13T23:03:32Z |
| publishDate | 2021-12-01 |
| publisher | AOSIS |
| record_format | Article |
| series | SA Journal of Human Resource Management |
| spelling | doaj.art-f9b507c8888a45bd99aa1d3a3c00620c2022-12-22T02:25:45ZengAOSISSA Journal of Human Resource Management1683-75842071-078X2021-12-01190e1e1410.4102/sajhrm.v19i0.1645634A measurement scale for assessing intellectual capital disclosureMpho D. Magau0Gerhard Roodt1Gerhardus van Zyl2Department of Industrial Psychology and People Management, Faculty College of Business and Economics, University of Johannesburg, JohannesburgDepartment of Industrial Psychology and People Management, Faculty College of Business and Economics, University of Johannesburg, JohannesburgDepartment of Industrial Psychology and People Management, Faculty College of Business and Economics, University of Johannesburg, JohannesburgOrientation: Intellectual capital disclosure (ICD) including structural capital (SC), human capital (HC), and relational capital (RC) of non-financial information creates a shareholder value. Conflicting evidence on this voluntary disclosure suggests the need to develop an ICD measurement scale for reducing information asymmetry in the annual financial reporting. Research purpose: The main aim of this study was to develop a multi-dimensional measurement scale consisting of groups of items for critically examining the extent of ICD in the corporate annual reports or integrated reports to build investor confidence. Motivation for the study: The lack of voluntary disclosure on intellectual capital (IC) increases information asymmetry and negatively affects investor decision-making. An ICD measurement scale is expected to facilitate the reliable extraction of non-financial information from the annual reports or integrated reports. Research approach/design and method: A quantitative cross-sectional study was used with an ICD measurement scale for extracting information from 150 annual reports of the Johannesburg Stock Exchange (JSE) listed companies. The measurement scale was subjected to exploratory factor analysis (EFA). Main findings: The ICD measurement scale yielded one factor structures across all three dimensions with internal reliability statistics (Cronbach alphas) of SC (0.849), HC (0.806) and RC (0.749), after the second level factor analysis. Practical/managerial implications: The ICD measurement scale will enable the market participants to understand how non-financial information can be extracted reliably from the annual reports and use to assess the value of intangible assets. Contribution/value-add: The novel contribution of the study is the construction of a measurement scale for assessing ICD.https://sajhrm.co.za/index.php/sajhrm/article/view/1645intellectual capital disclosurestructural capitalhuman capitalnon-financial informationinformation asymmetry |
| spellingShingle | Mpho D. Magau Gerhard Roodt Gerhardus van Zyl A measurement scale for assessing intellectual capital disclosure SA Journal of Human Resource Management intellectual capital disclosure structural capital human capital non-financial information information asymmetry |
| title | A measurement scale for assessing intellectual capital disclosure |
| title_full | A measurement scale for assessing intellectual capital disclosure |
| title_fullStr | A measurement scale for assessing intellectual capital disclosure |
| title_full_unstemmed | A measurement scale for assessing intellectual capital disclosure |
| title_short | A measurement scale for assessing intellectual capital disclosure |
| title_sort | measurement scale for assessing intellectual capital disclosure |
| topic | intellectual capital disclosure structural capital human capital non-financial information information asymmetry |
| url | https://sajhrm.co.za/index.php/sajhrm/article/view/1645 |
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