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The Mediating Effect of Intellectual Capital Disclosure Between Firm Characteristics and Firm Value: Empirical Evidence From Indonesian Company With Non-recursive Model Analysis

Author

Listed:
  • Toni Heryana
  • Sugeng Wahyudi
  • Wisnu Mawardi

Abstract

Based on the signaling theory, this study seeks to explain the interaction of corporate value and the disclosure of intellectual capital in a framework of analysis of recursive models. Testing the recursive model also involves firm size and company growth as a characteristic of the company to clarify the mediating role of intellectual capital in mediating both of the firm's values. We find a positive relationship between firm size and growth on intellectual capital disclosure. The greater the size and growth of the company, the more it encourages companies to disclose intellectual capital in the company's annual report. Also, we find a non-recursive model between intellectual capital disclosure and firm value. This shows that the broader the disclosure of IC information by the company, the better the investor's perception of the company is reflected in the value of the company. Meanwhile, at different times the current condition of the company's value will encourage companies to disclose more complete IC information.

Suggested Citation

  • Toni Heryana & Sugeng Wahyudi & Wisnu Mawardi, 2020. "The Mediating Effect of Intellectual Capital Disclosure Between Firm Characteristics and Firm Value: Empirical Evidence From Indonesian Company With Non-recursive Model Analysis," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(2), pages 14-25, April.
    • Handle: RePEc:jfr:ijfr11:v:11:y:2020:i:2:p:14-25
    DOI: 10.5430/ijfr.v11n2p14
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    References listed on IDEAS

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    1. Siti Mariana Taliyang & Rohaida Abdul Latif & Nurul Huda Mustafa, 2011. "The Determinants Of Intellectual Capital Disclosure Among Malaysian Listed Companies," International Journal of Management and Marketing Research, The Institute for Business and Finance Research, vol. 4(3), pages 25-33.
    2. Michael Spence, 2002. "Signaling in Retrospect and the Informational Structure of Markets," American Economic Review, American Economic Association, vol. 92(3), pages 434-459, June.
    3. Michael C. Jensen, 2010. "Value Maximization, Stakeholder Theory, and the Corporate Objective Function," Journal of Applied Corporate Finance, Morgan Stanley, vol. 22(1), pages 32-42, January.
    4. Richard Petty & Suresh Cuganesan, 2005. "Voluntary Disclosure of Intellectual Capital by Hong Kong Companies: Examining Size, Industry and Growth Effects Over Time," Australian Accounting Review, CPA Australia, vol. 15(36), pages 40-50, July.
    5. Hassan, Omaima A.G. & Romilly, Peter & Giorgioni, Gianluigi & Power, David, 2009. "The value relevance of disclosure: Evidence from the emerging capital market of Egypt," The International Journal of Accounting, Elsevier, vol. 44(1), pages 79-102, March.
    6. Edward Freeman, R. & Phillips, Robert A., 2002. "Stakeholder Theory: A Libertarian Defense," Business Ethics Quarterly, Cambridge University Press, vol. 12(3), pages 331-349, July.
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