Effects Of Intellectual Capital Disclosure On Market Capitalization Of Listed Companies In Ghana

Abstract

Purpose: The focus of the paper is to examine the effects of intellectual capital disclosure on market capitalization of the listed firms in Ghana. Methodology: The study used the annual reports and the share prices of twenty listed firms on the GSE from 2005 to 2014. The data was analyzed using pooled ordinary least square regression approach. Findings: The results of the study indicate that there is a positive significant effect of intellectual capital disclosure on market capitalization. Moreover all the components of intellectual capital (human, structural and relational) are found to be positively significant with market capitalization. Research implication: The results imply that investors who acquire the stocks of listed firms that disclose their IC are likely to experience appreciation of their share capital. Practical Implication: The study therefore recommends to the Security and Exchange Commission (SEC) and the Ghana Stock Exchange (GSE) to collaborate with the Institute of Chartered Accountants Ghana (ICAG) the accounting regulatory body in the country, perhaps, to develop guidelines or framework on IC disclosure in order to enhance the adequacy of such disclosures. Accountants of the listed firms should be empowered in the form of training in order to adequately disclose their wealth of IC. Originality/value: The paper is considered the first empirical study to examine the effects of IC disclosure on MCAP of listed firms in Ghana