This study undertakes a longitudinal examination of the intellectual capital disclosure practices of U.S. publicly traded companies in high-technology and traditional economic sectors to address the following research questions:
1. Have publicly traded U.S. companies increased the level of their intellectual capital disclosure in their annual reports?
2. Do high-tech U.S. companies provide more intellectual capital disclosure than traditional sector U.S. companies?
3. Does a relationship exist between the performance and/or value metrics of high-tech companies and their level of intellectual capital disclosure?
The study is limited to public companies that filed an SEC Form 10-K for both 2000 and 2004 fiscal years. The sample frame includes 150 high-tech and 150 traditional sector companies. To determine the level of intellectual capital disclosure of each sample firm, a content analysis of their SEC Forms 10-K for 2000 and 2004 provides a proxy for the level of intellectual capital disclosure. The resulting classification indicates if firms report on customer capital (e.g., customer loyalty, brands), supplier capital (e.g., distribution channels, licensing), organizational capital(e.g., corporate culture, networking systems), human capital (e.g., training, competence), and intellectual property (e.g., patents, trade secrets). Furthermore, the results of the content analysis indicate whether there is an increase in the level of intellectual capital disclosure between 2000 and 2004. The comparison of the level of intellectual capital disclosure by high-tech and traditional sector companies in both years also indicates if the former exhibit a higher level of disclosure.
Moreover, a correlation and multiregression analysis reveals whether a relationship exists between the level of intellectual capital disclosure and the value/size metrics and the performance metrics of a firm, though this investigation includes only the high-tech firms in the sample.