Corporate intellectual capital reporting: the case of Germany
This study investigates potential motivations for intellectual capital (IC) reporting in management reports of 428 German companies for the accounting year 2010. To infer motivations, agency theory and legitimacy theory are applied to test which theory better explains IC reporting. To approach methodological issues regarding how to measure IC value and IC reporting, the study is structured in three research projects. The first two research projects analyse methodological approaches, providing the basis for testing theories in project three. In the first project, a novel measure to estimate IC value is identified in the area of mergers and acquisitions research and innovatively applied to the area of IC research. This novel long-run value-to-book measure allows testing of previously untested IC-related hypotheses. The second research project supports a parsimonious design of a research framework for an IC content analysis and specifies which IC components are important to focus on. In the final project, the results show that legitimacy theory better explains IC reporting compared to agency theory. According to the findings, IC reporting is motivated to legitimise a company’s market position and to justify the use of intangible resources. The findings of this study contribute to the research areas of measuring IC value, analysing IC content, and applying theories to IC reporting.