Intellectual capital disclosures in Japanese IPO prospectuses

Abstract

Purpose

The purpose of this paper is to give an indication of the quantity of intellectual capital information in Japanese initial public offering (IPO) prospectuses from all stock exchange listings on the Japan Stock Exchange from 2003.

Design/methodology/approach

The paper applied a disclosure index consisting of 78 items to quantify the amount of information regarding intellectual capital included in the IPO prospectuses of Japanese companies. An analysis of variance (ANOVA) was used to test, controlling for technological type of the company (high‐tech/low‐tech), and whether the extent of managerial ownership prior to the IPO, company age and company size influenced disclosure.

Findings

From the analyses conclusions are derived for four hypotheses. The hypotheses “industry differences” (H1), “managerial ownership” (H2) and “company size” (H3) were found not to be significant factors explaining voluntary disclosure of information. The fourth factor, “company age” (H4), did, however, have a significant influence on the extent of disclosure for Japanese companies. Further testing of the Japanese companies regarding age showed a continuing trend.

Originality/value

Although Japan has been strongly associated with the concept of the knowledge society, Japanese studies regarding intellectual capital have been very scarce. No studies, to the best of one's knowledge, have examined the specific disclosure of intellectual capital information included in Japanese IPO prospectuses.

Citation

Rimmel, G., Nielsen, C. and Yosano, T. (2009), "Intellectual capital disclosures in Japanese IPO prospectuses", Journal of Human Resource Costing & Accounting, Vol. 13 No. 4, pp. 316-337. https://doi.org/10.1108/14013381011010150