Intellectual capital disclosure in Malaysian Initial Public Offering prospectuses and level of underpricing

Too, Shaw Warn (2014) Intellectual capital disclosure in Malaysian Initial Public Offering prospectuses and level of underpricing. PhD thesis, Multimedia University.

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Abstract

A firm’s resources may comprise both tangible and intangible [normally known as “Intellectual Capital (IC)”] elements. However, some elements of IC are not fully recognised in the financial reports and an incomplete disclosure on IC information may increase the information asymmetry gap between informed and uninformed users. In an Initial Public Offering (IPO) issue, when the information asymmetry gap gets larger, a higher cost of going public (‘underpricing”) may be experienced by the IPO firm. In order to reduce the information gap of the users of accounting information, business entities may disclose IC information to aid the users in arriving at an appropriate decision making. This study seeks to examine the extent and determinants of IC disclosure together with the role played (i.e. direct or mediation effect) by the disclosure in reducing the level of underpricing of the IPO issues. Empirical tests are conducted on 331 Malaysian IPO firms that underwent listing from 2002-2008. The extent of IC disclosure is measured by the ‘Disclosure Score Index’ and content analysis is performed on the IPO prospectuses. Structural Equation Modeling (SEM) path analysis is used to examine the determinants of IC disclosure and the impact of IC disclosure on underpricing. In particularly, bootstrapping confidence interval method is used to test for the mediation effect of IC disclosure. The findings of this study indicate that generally there is a relatively low extent of disclosure in respect to IC information among IPO firms. Among 10 determinants from the attributes of firms, management and advisors, seven of them (i.e. firm’s size, profitability, technology based sector, level of foreign activity, activeness of directors, reputation of underwriter and reporting accountant) are significant in influencing the extent of IC disclosure.

Item Type: Thesis (PhD)
Additional Information: Call No.: HD53 T66 2014
Uncontrolled Keywords: Intellectual capital
Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28-70 Management. Industrial Management > HD53 Intellectual work. Intellectual capital
Divisions: Graduate School of Management (GSM)
Depositing User: Ms Nurul Iqtiani Ahmad
Date Deposited: 27 Jan 2016 09:00
Last Modified: 27 Jan 2016 09:00
URI: http://shdl.mmu.edu.my/id/eprint/6296

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