Industry differences in intellectual property disclosure and corporate value: evidence from Japan

This study examines how intellectual property (IP) and intangible asset (IA) disclosure under Japan’s Corporate Governance Code (CGC)—specifically Supplementary Principles 3.1.3 and 4.2.2—affects corporate valuation. It focuses on disclosure behaviour across the Tokyo Stock Exchange (TSE) 33 industry sectors and its impact on financial performance and investor evaluation. Method: Companies listed on the TSE Prime and Standard Markets were classified into Comply and Explain groups based on their 2023 Corporate Governance Reports. Disclosure trends were analysed across the TSE33 industry sectors. Chi-square tests assessed the independence between industry classification and disclosure behaviour. Financial indicators such as R&D ratio, ROE, market capitalization, and PBR were compared using the Mann–Whitney U test. A regression analysis examined the link between the comply rate and patent application intensity using Japan Patent Office data. Results: The Comply group exhibited higher market capitalization, suggesting a positive association between IP disclosure and investor valuation. Industry-level differences were significant, especially in Chemicals and Other Products. A moderate positive correlation (R = 0.644, p = 0.017) was observed between patent activity and the comply rate, indicating that innovation-active sectors tend to disclose more. Conclusion: IP/IA disclosure correlates with higher corporate valuation and mirrors underlying innovation, with notable variation across TSE33 industries. While disclosure fosters investor confidence, risks by symbolic comply persist in highly conforming sectors. These findings support aligning governance with intangible-driven value creation.