Intellectual capital and capital markets: additional evidence

摘要

Purpose - The purpose of this paper is to first examine whether intellectual capital (IC) information is considered in firm valuation. Next, to examine two issues: financial analysts' investment recommendations when faced with different combinations of performance levels (i.e. above or below industry average) of financial and IC measures, and the role of financial and IC measures with different performance levels and holding periods (i.e. short-term vs long-term) for the investment on analysts' recommendations. Design/methodology/approach - The first part of the paper used secondary (both archival and survey) data. The second part was an experiment. Findings - The findings in the first part show that, after controlling for the effect of financial performances on firm value, measures of IC are still significant explanatory variables (of firm value). The second part shows that the financial and IC measures affect financial analysts' investment recommendations differently depending on the measures' levels of performance and the time horizon for holding the investments. Research limitations/implications - The limitations of the paper are as follows: the use of secondary data from a single country limits its generalizability; and the results of the experiment are parameterized by the research design such as the amount of information provided to the financial analysts. Extending the analyses to other settings and using time-series data represent future research opportunities. Originality/value - The research makes three contributions to the IC literature. First, it extends the studies on the relevance of IC in capital market research by broadening its scope to include measures of IC other than R&D intensity. Next, it provides evidence of the informativeness of IC measures in market valuation of firms and analysts' recommendations, thus lending credence to the arguments of reports and researchers for more external communication of IC information. Finally, this study is one of the first to examine a broader scope of IC in the capital market context and the use of IC by sophisticated market participants. With policy-makers and standard-setting bodies considering proposals to enhance information on IC in financial reports, it is important to broaden the scope of IC metrics and understand their role in enhancing firm value to develop a framework for reporting IC.