Corporate Governance, Market Share, and Intellectual Capital Disclosure: Evidence from the Indonesian Agriculture and Mining Sectors
Abstract
Using a sample of Indonesian agricultural and mining companies, this study aims to provide empirical evidence to prove the effects of auditor type, the board size, and audit committee on intellectual capital disclosure (ICD). The sample consisted of 18 agricultural and 28 mining companies, which were chosen using the content analysis method. The five-year observation period lasted from 2013 to 2017, resulting in 230 units of analysis. Data analysis employed a panel regression model with panel data testing. The study finds a positive impact of auditor type and audit committee on ICD as well as a negative influence of board size on ICD. The results conform to existing stakeholder and legitimacy theories.
Keywords: Intellectual capital disclosure; auditor type; board size; audit committee
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References
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Ahmadi, A., & Bouri, A. (2017). The effect of audit quality on the extent of voluntary disclosure: Companies listed in the Tunisian stock exchange. Journal of the Knowledge Economy, 10(1), 59-73.
Ahmed Haji, A. (2015). The role of audit committee attributes in intellectual capital disclosures. Managerial Auditing Journal, 30(8/9), 756–784.
Al Azees, H. A. R., Sukoharsono, E. G., Roekhudin, & Andayani, W. (2019). The impact of board characteristics on earning management in the international oil and gas corporations. Academy of Accounting and Financial Studies Journal, 23(1), 1-26.
Alizadeh, R., Chashmi, S. A. N., & Bahnamiri, A. J. (2014). Corporate governance and intellectual capital. Management Science Letter, 4, 181-186.
Allegrini, M., & Greco, G. (2011). Corporate boards, audit committees and voluntary disclosure: evidence from Italian Listed Companies. Journal of Management and Governance, 15(3), 1-30.
An, Y., Davey, H., & Eggleton, I. (2011). Towards a comprehensive theoretical framework for voluntary IC disclosure. Journal of Intellectual Capital, 12(4), 571-585.
Atan, R. & Rahim, A. (2012). Corporate reporting on intellectual capital: Evidence from ace market of bursa Malaysia. IEE, 1021-1026
Aygun, M., Ic, S., &Sayim, M. (2014). The effects of corporate ownership structure and board size on earnings management: Evidence from Turkey. International Journal of Business and Management, 9(12),123-126
Bagchi, D., Joshi, P.L., & Salleh, N.M.Z.N. (2015). The extent of disclosure on implicit capital and firm’s characteristics: Malaysian experience. International Journal of Learning & Intellectual Capital, 12(2), 170-192.
Berzkalne, I., & Zelgalve, E. (2014). Intellectual capital and company value. Procedia - Social and Behavioral Sciences, 110, 887-896.
Bhasin, M. (2012). Measurement and Disclosure of Intellectual Capital: Evidence from a Developing Country. International Journal of Finance and Accounting, 1(5), 82-93.
Bhatia, M., & Agarwal. B (2015). Intellectual Capital Disclosures in IPO Prospectuses of Indian Companies. International Journal of Social Sciences and Management, 2(1).
Bruggen, A., Vergauwen, P., & Dao, M. (2009). Determinants of intellectual capital disclosure: Evidence from Australia. Management Decision, 47(2), 233-245.
Buallay, A. (2018). Audit committee characteristics: an empirical investigation of the contribution to intellectual capital efficiency. Measuring Business Excellence, 22(2), 183-200.
Cerbioni, F., & Parbonetti, A. (2007). Exploring the effects of corporate governance on intellectual capital disclosure: An analysis of Europe and biotechnology companies. European Accounting Review, 16(4), 791-826.
Chao, G. & Gray, S. J. (2010). Family ownership, board independence and voluntary disclosure: Evidence from Hong Kong. Journal of International Accounting, Auditing, & Taxation, 19, 93-104
Cheng, M.Y., Lin, J.Y., Hsiao, T.Y. & Lin, T. W. (2010). Invested resource, competitive intellectual capital, and corporate performance. Journal of Intellectual capital, 11(4), 433-450.
Chowdhury, L., Rana, T., Akter, M., & Hoque, M. (2018). Impact of intellectual capital on financial performance: evidence from the Bangladeshi textile sector. Journal of Accounting and Organizational Change, 14(4), 429-454.
Čepar, Ž., & Bojnec, Š. (2008). Population aging and the education market in Slovenia and Croatia. Eastern European economics, 46, 68–86.
Domínguez, M. Á. (2012). Company characteristics and human resource disclosure in Spain. Social Responsibility Journal, 8(1), 4-20.
Dwiarto, D (2018). Pertambangan masih menjadi tulang punggung keluarga. Indonesia Mining Association. Retrieved Feb 20th, 2019 from http://www.ima-api.com/index.php?
option=com_content&view=article&id=3547%3Apertambangan-masih-jadi-tulang-punggung-negara&catid=47%3Amedia-news&Itemid=98&lang=id
Ferreira, A. L., Branco, M. C., & Moreira, J. A. (2012). Factors influencing intellectual capital disclosure by Portuguese companies. International Journal of Accounting & Financial Reporting, 2(2). doi:10.5296/ijafr.v2i2.2844.
Freeman, R. E. (1994). The Politics of Stakeholder Theory: Some Future Directions. Business Ethics Quarterly, 4(4), 409-421. doi:10.2307/3857340
Guthrie, J., Petty, R., Yongvanich, K., & Ricceri, F. (2004). Using content analysis as a research method to inquire into intellectual capital reporting. Journal of Intellectual Capital, 5(2), 282-293.
Guthrie, J., Ricceri, F., & Dumay, J. (2012). Reflections and projections: A decade of Intellectual Capital Accounting Research. British Accounting Review, 44(2), 68–82.
Haji, A. A., & Ghazali, N.A.M. (2013). A longitudinal examination of intellectual capital disclosures and corporate governance attributes in Malaysia. Asian Review of Accounting, 12(1), 27-52.
Hermannsson, K., & Lecca, P. (2014). Human capital investment and population growth: An overlapping generations analysis for Malawi," EcoMod2014 6823, EcoMod.
Hidalgo, R., Garcia-Meca, E., & Martinez, I. (2011). Corporate governance and intellectual capital disclosure. Journal of Business Ethics, 100(3), 483-495.
Ho, S.S.M, & Wong, K.S. (2001). A study of the relationship between corporate governance structures and the extent of voluntary disclosure. Journal of International Accounting, 10(2), 139-156.
Hossain, M. (2011). Intellectual capital reporting in a South Asian country: Evidence from Bangladesh. Journal of Human Resource Costing & Accounting, 15(3), 196-233.
Iraya C., Mwangi, M., & Muchoki, G. (2015). The effect of corporate governance Practices on earnings management of Companies listed at the Nairobi Securities Exchange. European Scientific Journal, 11(1) 169-178
Jindal, S., & Kumar, M. (2012). The determinants of HC disclosures of Indian firms. Journal of Intellectual Capital, 13(2), 221-247
Kamath, B. (2017). Determinants of intellectual capital disclosure: Evidence from India. Journal of Financial Reporting and Accounting, 15(3), 367-391.
Kementrian Pertanian Republik Indonesia (2017). FAO: Indonesia dan Thailand produsen beras terbesar di dunia. Retrieved March 24th, 2019 from http://www.pertanian.go.id/home/?show=news&act=view&id=2342
Khlif, H. & Souissi, M. (2010). The determinants of corporate disclosure: a meta-analysis. International journal of accounting and information management, 18(3), 198-219
Kijboonchoo, T., Kulchanachutiporn, C., & Soralam, N. (2018). A structural analyses of ten economies in ASEAN economic community. Assumption Journal, 38(1), 18-29.
Klein, A. G., Gerhard, C., Biichner, R. D., Diestel, S. and Schermelleh-Engel, K.(2016), The detection of heteroscedasticity in regression models for psychological data, Psychological Test and Assessment Modeling, 58(4), 567-592.
Kothari, S. P. (2000). The Role of Financial Reporting in Reducing Financial Risks in the Market. in E. S. Rosengren and J. S. Jordan(eds.), Building an Infrastructure for Financial Stability (pp. 89–102), (Federal Reserve Bank of Boston Conference Series, No. 44), .
Li, J., Mangena, M., & Pike, R. (2012). The effect of audit committee characteristics on intellectual capital disclosure. The British Accounting Review, 44(2), 98-110.
Maaloul, A., & Zéghal, D. (2015). Financial statement informativeness and intellectual capital disclosure: An empirical analysis. Journal of Financial Reporting and Accounting, 13(1), 66-90.
Madi, H. K., Ishak, Z., & Manaf, N. A. A. (2014). The impact of audit committee characteristics on corporate voluntary disclosure. Social and Behavioral Sciences, 16, 486 – 492
Malone, D., Fries, C. & Jones, T. (1993). An empirical investigation of the extent of corporate financial disclosure in the oil and gas industry. Journal of Accounting, Auditing and Finance, 8(3), 249-73.
Massingham, P.R., & Tam, L. (2015). The relationship between human capital, value creation and employee reward. Journal of Intellectual Capital, 16(2), 390-418.
Mondal A., & Ghosh (2014). Determinants of intellectual capital disclosure practices of Indian companies. Journal of Commerce and Accounting Research, 3(3), 25-36.
Mukhibad, H., & Setyawati, M E. (2019). Profitabilitas Pemoderasi Determinan Pengungkapan Modal Intelektual. Jurnal Ilmiah Akuntansi dan Bisnis, 14(1), 120-131.
Nazir, M.S., Saita, H.K., Ahmed, I., & Nawaz, M.M. (2012). The impact of financial leverage on agency cost: Empirical evidence from non-financial sector on Pakistan. Science Series Data Report, 4(6), 79-94.
Oliveira, L., Rodrigues, L.L., & Craig, R. (2006). Firm-specific determinants of intangibles reporting: evidence from the Portuguese stock market. Journal of Human Resource Costing and Accounting, 10(1), 11-33.
Ousama, A.A., Fatima, A.H., & Majdi, A.R. (2012). Determinants of intellectual capital reporting: Evidence from annual reports of Malaysian listed companies. Journal of Accounting in Emerging Economies, 2(2), 119 - 139.
Oxford Business Group (2018). Indonesia's mining sector seeks to boost downstream activity. Retrieved March 23rd, 2019 from https://oxfordbusinessgroup.com/overview/balancing-act-low-commodity-prices-and-drive-bolster-downstream-activity-require-nuanced-approach
Rashid, A. A., Ibrahim, M. K., Othman, R., & See, K. F. (2012). IC disclosures in IPO prospectuses: evidence from Malaysia. Journal of Intellectual Capital, 13(1), 57-80.
Roos, G., & Roos, J. (1997). Measuring your company's intellectual performance. Long Range Planning, 30(3),413-426.
Sveiby, K. E. (1997). The New Organizational Wealth: Managing and Measuring Knowledge Based Assets. Page 275
Smith Report. (2003). Audit committees: combined code guidance. London: FRC.
Whiting, R.H., & Birch, G.Y. (2016). Corporate governance and intellectual capital disclosure. Corporate Ownership and Control, 13(2), 250-261.
Whiting, R.H., & Woodcock, J. (2011). Firm characteristics and intellectual capital disclosure by Australian companies. Journal of Human Resource Costing and Accounting, 15(2), 102 - 126.
Yau, F.S., Chun, L.S., & Balaram, R. (2009). Intellectual capital reporting and corporate characteristics of public-listed companies in Malaysia. Journal of Financial Reporting and Accounting, 7(1), 17-35.
Ahmadi, A., & Bouri, A. (2017). The effect of audit quality on the extent of voluntary disclosure: Companies listed in the Tunisian stock exchange. Journal of the Knowledge Economy, 10(1), 59-73.
Ahmed Haji, A. (2015). The role of audit committee attributes in intellectual capital disclosures. Managerial Auditing Journal, 30(8/9), 756–784.
Al Azees, H. A. R., Sukoharsono, E. G., Roekhudin, & Andayani, W. (2019). The impact of board characteristics on earning management in the international oil and gas corporations. Academy of Accounting and Financial Studies Journal, 23(1), 1-26.
Alizadeh, R., Chashmi, S. A. N., & Bahnamiri, A. J. (2014). Corporate governance and intellectual capital. Management Science Letter, 4, 181-186.
Allegrini, M., & Greco, G. (2011). Corporate boards, audit committees and voluntary disclosure: evidence from Italian Listed Companies. Journal of Management and Governance, 15(3), 1-30.
An, Y., Davey, H., & Eggleton, I. (2011). Towards a comprehensive theoretical framework for voluntary IC disclosure. Journal of Intellectual Capital, 12(4), 571-585.
Atan, R. & Rahim, A. (2012). Corporate reporting on intellectual capital: Evidence from ace market of bursa Malaysia. IEE, 1021-1026
Aygun, M., Ic, S., &Sayim, M. (2014). The effects of corporate ownership structure and board size on earnings management: Evidence from Turkey. International Journal of Business and Management, 9(12),123-126
Bagchi, D., Joshi, P.L., & Salleh, N.M.Z.N. (2015). The extent of disclosure on implicit capital and firm’s characteristics: Malaysian experience. International Journal of Learning & Intellectual Capital, 12(2), 170-192.
Berzkalne, I., & Zelgalve, E. (2014). Intellectual capital and company value. Procedia - Social and Behavioral Sciences, 110, 887-896.
Bhasin, M. (2012). Measurement and Disclosure of Intellectual Capital: Evidence from a Developing Country. International Journal of Finance and Accounting, 1(5), 82-93.
Bhatia, M., & Agarwal. B (2015). Intellectual Capital Disclosures in IPO Prospectuses of Indian Companies. International Journal of Social Sciences and Management, 2(1).
Bruggen, A., Vergauwen, P., & Dao, M. (2009). Determinants of intellectual capital disclosure: Evidence from Australia. Management Decision, 47(2), 233-245.
Buallay, A. (2018). Audit committee characteristics: an empirical investigation of the contribution to intellectual capital efficiency. Measuring Business Excellence, 22(2), 183-200.
Cerbioni, F., & Parbonetti, A. (2007). Exploring the effects of corporate governance on intellectual capital disclosure: An analysis of Europe and biotechnology companies. European Accounting Review, 16(4), 791-826.
Chao, G. & Gray, S. J. (2010). Family ownership, board independence and voluntary disclosure: Evidence from Hong Kong. Journal of International Accounting, Auditing, & Taxation, 19, 93-104
Cheng, M.Y., Lin, J.Y., Hsiao, T.Y. & Lin, T. W. (2010). Invested resource, competitive intellectual capital, and corporate performance. Journal of Intellectual capital, 11(4), 433-450.
Chowdhury, L., Rana, T., Akter, M., & Hoque, M. (2018). Impact of intellectual capital on financial performance: evidence from the Bangladeshi textile sector. Journal of Accounting and Organizational Change, 14(4), 429-454.
Čepar, Ž., & Bojnec, Š. (2008). Population aging and the education market in Slovenia and Croatia. Eastern European economics, 46, 68–86.
Domínguez, M. Á. (2012). Company characteristics and human resource disclosure in Spain. Social Responsibility Journal, 8(1), 4-20.
Dwiarto, D (2018). Pertambangan masih menjadi tulang punggung keluarga. Indonesia Mining Association. Retrieved Feb 20th, 2019 from http://www.ima-api.com/index.php?
option=com_content&view=article&id=3547%3Apertambangan-masih-jadi-tulang-punggung-negara&catid=47%3Amedia-news&Itemid=98&lang=id
Ferreira, A. L., Branco, M. C., & Moreira, J. A. (2012). Factors influencing intellectual capital disclosure by Portuguese companies. International Journal of Accounting & Financial Reporting, 2(2). doi:10.5296/ijafr.v2i2.2844.
Freeman, R. E. (1994). The Politics of Stakeholder Theory: Some Future Directions. Business Ethics Quarterly, 4(4), 409-421. doi:10.2307/3857340
Guthrie, J., Petty, R., Yongvanich, K., & Ricceri, F. (2004). Using content analysis as a research method to inquire into intellectual capital reporting. Journal of Intellectual Capital, 5(2), 282-293.
Guthrie, J., Ricceri, F., & Dumay, J. (2012). Reflections and projections: A decade of Intellectual Capital Accounting Research. British Accounting Review, 44(2), 68–82.
Haji, A. A., & Ghazali, N.A.M. (2013). A longitudinal examination of intellectual capital disclosures and corporate governance attributes in Malaysia. Asian Review of Accounting, 12(1), 27-52.
Hermannsson, K., & Lecca, P. (2014). Human capital investment and population growth: An overlapping generations analysis for Malawi," EcoMod2014 6823, EcoMod.
Hidalgo, R., Garcia-Meca, E., & Martinez, I. (2011). Corporate governance and intellectual capital disclosure. Journal of Business Ethics, 100(3), 483-495.
Ho, S.S.M, & Wong, K.S. (2001). A study of the relationship between corporate governance structures and the extent of voluntary disclosure. Journal of International Accounting, 10(2), 139-156.
Hossain, M. (2011). Intellectual capital reporting in a South Asian country: Evidence from Bangladesh. Journal of Human Resource Costing & Accounting, 15(3), 196-233.
Iraya C., Mwangi, M., & Muchoki, G. (2015). The effect of corporate governance Practices on earnings management of Companies listed at the Nairobi Securities Exchange. European Scientific Journal, 11(1) 169-178
Jindal, S., & Kumar, M. (2012). The determinants of HC disclosures of Indian firms. Journal of Intellectual Capital, 13(2), 221-247
Kamath, B. (2017). Determinants of intellectual capital disclosure: Evidence from India. Journal of Financial Reporting and Accounting, 15(3), 367-391.
Kementrian Pertanian Republik Indonesia (2017). FAO: Indonesia dan Thailand produsen beras terbesar di dunia. Retrieved March 24th, 2019 from http://www.pertanian.go.id/home/?show=news&act=view&id=2342
Khlif, H. & Souissi, M. (2010). The determinants of corporate disclosure: a meta-analysis. International journal of accounting and information management, 18(3), 198-219
Kijboonchoo, T., Kulchanachutiporn, C., & Soralam, N. (2018). A structural analyses of ten economies in ASEAN economic community. Assumption Journal, 38(1), 18-29.
Klein, A. G., Gerhard, C., Biichner, R. D., Diestel, S. and Schermelleh-Engel, K.(2016), The detection of heteroscedasticity in regression models for psychological data, Psychological Test and Assessment Modeling, 58(4), 567-592.
Kothari, S. P. (2000). The Role of Financial Reporting in Reducing Financial Risks in the Market. in E. S. Rosengren and J. S. Jordan(eds.), Building an Infrastructure for Financial Stability (pp. 89–102), (Federal Reserve Bank of Boston Conference Series, No. 44), .
Li, J., Mangena, M., & Pike, R. (2012). The effect of audit committee characteristics on intellectual capital disclosure. The British Accounting Review, 44(2), 98-110.
Maaloul, A., & Zéghal, D. (2015). Financial statement informativeness and intellectual capital disclosure: An empirical analysis. Journal of Financial Reporting and Accounting, 13(1), 66-90.
Madi, H. K., Ishak, Z., & Manaf, N. A. A. (2014). The impact of audit committee characteristics on corporate voluntary disclosure. Social and Behavioral Sciences, 16, 486 – 492
Malone, D., Fries, C. & Jones, T. (1993). An empirical investigation of the extent of corporate financial disclosure in the oil and gas industry. Journal of Accounting, Auditing and Finance, 8(3), 249-73.
Massingham, P.R., & Tam, L. (2015). The relationship between human capital, value creation and employee reward. Journal of Intellectual Capital, 16(2), 390-418.
Mondal A., & Ghosh (2014). Determinants of intellectual capital disclosure practices of Indian companies. Journal of Commerce and Accounting Research, 3(3), 25-36.
Mukhibad, H., & Setyawati, M E. (2019). Profitabilitas Pemoderasi Determinan Pengungkapan Modal Intelektual. Jurnal Ilmiah Akuntansi dan Bisnis, 14(1), 120-131.
Nazir, M.S., Saita, H.K., Ahmed, I., & Nawaz, M.M. (2012). The impact of financial leverage on agency cost: Empirical evidence from non-financial sector on Pakistan. Science Series Data Report, 4(6), 79-94.
Oliveira, L., Rodrigues, L.L., & Craig, R. (2006). Firm-specific determinants of intangibles reporting: evidence from the Portuguese stock market. Journal of Human Resource Costing and Accounting, 10(1), 11-33.
Ousama, A.A., Fatima, A.H., & Majdi, A.R. (2012). Determinants of intellectual capital reporting: Evidence from annual reports of Malaysian listed companies. Journal of Accounting in Emerging Economies, 2(2), 119 - 139.
Oxford Business Group (2018). Indonesia's mining sector seeks to boost downstream activity. Retrieved March 23rd, 2019 from https://oxfordbusinessgroup.com/overview/balancing-act-low-commodity-prices-and-drive-bolster-downstream-activity-require-nuanced-approach
Rashid, A. A., Ibrahim, M. K., Othman, R., & See, K. F. (2012). IC disclosures in IPO prospectuses: evidence from Malaysia. Journal of Intellectual Capital, 13(1), 57-80.
Roos, G., & Roos, J. (1997). Measuring your company's intellectual performance. Long Range Planning, 30(3),413-426.
Sveiby, K. E. (1997). The New Organizational Wealth: Managing and Measuring Knowledge Based Assets. Page 275
Smith Report. (2003). Audit committees: combined code guidance. London: FRC.
Whiting, R.H., & Birch, G.Y. (2016). Corporate governance and intellectual capital disclosure. Corporate Ownership and Control, 13(2), 250-261.
Whiting, R.H., & Woodcock, J. (2011). Firm characteristics and intellectual capital disclosure by Australian companies. Journal of Human Resource Costing and Accounting, 15(2), 102 - 126.
Yau, F.S., Chun, L.S., & Balaram, R. (2009). Intellectual capital reporting and corporate characteristics of public-listed companies in Malaysia. Journal of Financial Reporting and Accounting, 7(1), 17-35.
Published
2020-01-20
How to Cite
HATANE, Saarce Elsye et al.
Corporate Governance, Market Share, and Intellectual Capital Disclosure: Evidence from the Indonesian Agriculture and Mining Sectors.
Jurnal Ilmiah Akuntansi dan Bisnis, [S.l.], v. 15, n. 1, p. 75-84, jan. 2020.
ISSN 2303-1018.
Available at: <https://ojs.unud.ac.id/index.php/jiab/article/view/49727>. Date accessed: 19 sep. 2024.
doi: https://doi.org/10.24843/JIAB.2020.v15.i01.p07.
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