EuroEconomica, Vol 32, No 2 (2013)

Value relevance of intellectual capital reporting in top Nigerian firms

Victor Chiedu Oba, Nana Bature


The purpose of this study is to examine the link between corporate financial performance and Intellectual capital disclosures among top Nigerian companies for a four year period from 2006 to 2009. Return on capital employed was utilized as a proxy for financial performance while an Intellectual capital disclosure index was developed to capture the extent to which such voluntary disclosure was made. The study employed board nationality diversity as a moderating variable in the investigated relationship. This was denoted as the number of nationalities found on the board. A multiple regression analysis was used to investigate the potential relationship existing among the variables. Results of this study show that intellectual capital disclosures have a positive significant impact on financial performance while board nationality diversity has no impact on financial performance. The findings in this study provide some evidence supporting the signals theory whereby voluntary disclosure practices inform stakeholders of certain vital information which are critical in investment decision making and consequently have a return effect on corporate financial performance. The study thus recommends that firms adopt a holistic voluntary disclosure framework in order to enjoy associated economic benefits that accrue in this vein.


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