The impact of Firm size, leverage, and Profitability on the Disclosure level of intellectual capital
https://doi.org/10.26794/2587-5671-2022-26-5-49-59
Abstract
The transformation of the economy from a production-based economy to a knowledge economy has increased the relevance of Intellectual Capital (IC). With the emergence of the Integrated reporting framework, the corporates have started reporting intellectual capital in annual reports, business responsibility reports.
The present study aims to examine the relationship between the IC disclosure (ICD) and variables like Firm Size, Leverage, and Company Profitability. To find the relationship, a sample of 30 Bombay stock exchange-listed non-financial firms have been taken into consideration for three years, 2018–2020.
he study concludes that firm size positively impacts the disclosure of IC. It can be inferred that the medium and small firms will not disclose much information related to Intellectual capital than large corporations. However, leverage negatively affects the disclosure of IC. It is rightly supported as higher the leverage; low disclosure will be there as investors wouldn’t be willing to invest in the organization. To attract investments, organizations wouldn’t disclosure the debt level. There is no influence of profitability on the ICD. The authors believe that the government should spread awareness about the disclosure of Intellectual Capital at the macro level and train the employees and management at all levels and sizes to increase the disclosure level.
About the Authors
S. Singhal
Amity University; Trinity Institute of Professional Studies
India
Competing Interests:
India
Soumya Singhal — Research Scholar; Assist. Prof.
Noida, Uttar Pradesh
Dwarka
Competing Interests:
The authors have no confl icts of interest to declare
S. Gupta
Amity University
India
Competing Interests:
India
Seema Gupta — PhD in finance, Professor, Amity College of Commerce and Finance
Noida, Uttar Pradesh
Competing Interests:
The authors have no confl icts of interest to declare
V. K. Gupta
Indian Institute of Management
India
Competing Interests:
India
Vijay K. Gupta — PhD, Professor
Indore, Madhya Pradesh
Competing Interests:
The authors have no confl icts of interest to declare
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Review
For citations:
Singhal S., Gupta S., Gupta V.K. The impact of Firm size, leverage, and Profitability on the Disclosure level of intellectual capital. Finance: Theory and Practice. 2022;26(5):49-59. https://doi.org/10.26794/2587-5671-2022-26-5-49-59
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