The contributing factors of intellectual capital disclosures in agriculture and mining sectors of Indonesia and Thailand

Saarce Elsye Hatane, Josua Tarigan, Elenne Stefanie Kuanda and Elizabeth Cornelius

Accounting Research Journal, 2021, vol. 35, issue 2, 196-218

Abstract: Purpose - This study aims to examine the factors affecting intellectual capital disclosure (ICD), especially in the agriculture and mining sectors in Indonesia and Thailand. Additionally, this study discusses the difference in ICD levels between Indonesia and Thailand. Design/methodology/approach - The sample used is companies listed on the Indonesia Stock Exchange and Stock Exchange of Thailand from 2013 to 2017. The method used is a content analysis of 380 annual reports (150 from Thailand and 230 from Indonesia). This study uses a panel regression model. Variables tested are firm size, market shares, minority shareholders, profitability, leverage and the focus on ICD components such as human capital disclosure, structural capital disclosure and relational capital disclosure. Findings - IC disclosures in financial statements are generally oriented to past events and focus more on the human capital component. Overall, ICDs in Thailand are more qualified than in Indonesia. The findings support the stakeholder and legitimacy theories. It was found that the greater the company’s resources, the higher the quality of disclosure of all intellectual capital (IC) components. Conversely, when associated with the position in the market, companies reduce the disclosures. As the company has gained the government’s legitimacy, management’s passion for revealing more about its ICD is diminishing. Research limitations/implications - This study focuses on the agriculture and mining sectors in Indonesia and Thailand. The annual report is the primary medium to observe IC in qualitative and quantitative ways, yet firms would use other means to disclose their IC. This study deploys the content analysis method, in which the determination of scores is based on the researchers’ judgment. Originality/value - This study contributes to the ICD-related literature by focusing on the agriculture and mining industries and multinational scopes. The ICD valuation is extended to the quality of disclosures, in which numerical and monetary figures also support the disclosures. This study also examined minority shareholders’ role in ICD quality, which is infrequent in ICD literature.

Keywords: Indonesia; Thailand; Intellectual capital disclosures; Quality of disclosures; Market share; Minority interest (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eme:arjpps:arj-02-2020-0022

DOI: 10.1108/ARJ-02-2020-0022

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