Since the early 1990s, the researches in the stream of Intellectual Capital (IC) provided a lot of definitions or terms relating to it or Intangible Assets (IAs). Taking into account different cross-disciplinary studies, some scholars identified IC or IAs as various resources, properties and attributes, or in other words as a non-monetary asset which is able to generate value or future benefits (Choong, 2008). From a non-accounting perspective, several definitions proposed a categorization of IC which can be grouped into three components: structural capital, organizational capital and relational or external capital (Sveiby, 1997; Stewart, 1998; Edvinsson and Malone, 1998; Sullivan, 2000; MERITUM, 2002; Bontis, 2002; Mouritsen et al. 2002; Pablos, 2003; Marr and Adams, 2004). Nevertheless, drawing upon the growing relevance to the relational resources, such as the customer relationships (Dyer and Singh, 1998; Srivastava et al., 2001; Gulati et al., 2002; de Pablos, 2003; Khalifa, 2004; Duparc, 2012; Sussan, 2012) and the social capital (Nahapiet and Ghoshal, 1998; OECD, 2002; Adler and Know, 2002, ADECCO, 2007; Arregle et al. 2007; Zahara, 2010; Still et al. 2013), the present study is mostly focused on the relational capital. “Any company that has clients have capital client” (Stewart, 1999, p.186) states that the main theme of relational capital (RC) is the knowledge embedded in the marketing channels and customer relationships that an organization develops (Bontis, 1998). However, RC cannot be identified only as customer relations but it also must be extended to the relations with all external stakeholders. Recently, the International Integrated Reporting Council (IIRC, <IR> Framework, December 2013) proposed a new categorization distinguishing relational capital from social capital. Despite the RC crucial role in firm value creation, it has not been disclosed in the mandatory annual reports or in other stand-alone reports drawn up voluntarily by companies. In response to this gap, the main purposes of the present study are to: 1. investigate how relational capital disclosure (RCD) features in corporate reports, making a distinction between information disclosed in mandatory and voluntary reports; 2. understand how each European listed company, comprised in our sample, may be more or less sensitive to the RCD; 3. look into the influence of specific environmental factors (i.e. typology of legal system); 4. examine the relationship between the RCD and some corporate performance indicators. We carry out a cross-country analysis, through a sample of 80 European listed companies. To be more specific, we considered the following European countries: France, Germany, Italy and the UK. From the methodological standpoint, a content analysis (CA) is performed on the basis of 52 items inherent to RC framework on mandatory and voluntary reports. Then, we build a RCD Index by means of the principal component analysis (CPA) (Jackson, 1991). This disclosure index is used in some bivariate and multivariate statistical analyses, to investigate the following research question, i.e. whether and to what extent, RCD affects the firm growth and performance. In more detail, with reference to the bivariate analyses, we adopt some non-parametric tests (i.e. Kruskal-Wallis and Mann_Whitney) to verify the presence of statistical differences, in terms of specific environmental factors (i.e. typology of legal system) and of sensitivity for the RCD, between the European countries included in our sample. Afterwards, with respect to the multivariate analyses, we run some OLS regression models in which between the independent variables and the dependent one there is a lag of two years. Indeed, the dependent variables refer to the 2013 financial year, whilst the independent ones encompasses the 2011 financial year. In other words, we attempt to examine in depth the influence exerted by RCD on firm growth and performance, in the next two years to 2011 (i.e. relatively to the two-year period 2012-2013). Furthermore, we compute some robustness tests to check the reliability of our findings. In order to explore the research question above mentioned, we formulate some research hypotheses. Each of them seeks to test whether RCD is positively related to some indicators, used as proxies for measuring the firm growth and performance. There are a lot of studies which tried to gauge the quantity and the quality of Intellectual Capital Disclosure (ICD) but, at the same time, there is a growing interest in order to highlight the contribution of ICD and, in particular, of RCD to the firm growth and the financial performance (Luo et al., 2004; Chen et al., 2005; Tan et al., 2007; de Leanize, del Bosque, 2014; Salehi et al., 2014). To this end, the present study could give a useful insight on the current debate about the consequences produced by RC reporting on firm growth and performance. Moreover, in terms of practical implications, it could encourage preparers to improve the disclosure of specific items inherent to the RC. Overall, this empirical study could offer useful suggestions for policy makers, for instance for the European Commission, as it latterly stated new requirements about non-financial information reporting (European Commission, Disclosure of non-financial and diversity information by large companies and groups, Statement 14/124 which amends Directive 2013/34/EU). The sample size represents the main caveat of this study, as the observations amount to 80. Nonetheless, our results could suggest further future researches. Indeed, it could be interesting to include the variable inherent to the directors relation capital, in the items that compose the RCD index. In this way, the index above mentioned covers not only a relevant but also an emergent feature of the corporate governance model. Lastly, it is necessary to extend the cross-country study, in order to encompass other European State Members, as in the previous studies particular attention has been devoted to the emerging and developing economies (i.e. China, India, etc.).

Bianchi Martini, S., Corvino, A., Doni, F., Rigolini, A. (2014). The Relational Capital Disclosure in Corporate Reporting: what Consequences for Firm Performance? a Perspective from Europe. In Interdisciplinary Workshop on Intangibles, Intellectual Capital and Financial Information, Ferrara, 18-19 September 2014 (pp.1-10). European Institute in Advanced Studies on Management EIASM.

The Relational Capital Disclosure in Corporate Reporting: what Consequences for Firm Performance? a Perspective from Europe

DONI, FEDERICA
Penultimo
;
2014

Abstract

Since the early 1990s, the researches in the stream of Intellectual Capital (IC) provided a lot of definitions or terms relating to it or Intangible Assets (IAs). Taking into account different cross-disciplinary studies, some scholars identified IC or IAs as various resources, properties and attributes, or in other words as a non-monetary asset which is able to generate value or future benefits (Choong, 2008). From a non-accounting perspective, several definitions proposed a categorization of IC which can be grouped into three components: structural capital, organizational capital and relational or external capital (Sveiby, 1997; Stewart, 1998; Edvinsson and Malone, 1998; Sullivan, 2000; MERITUM, 2002; Bontis, 2002; Mouritsen et al. 2002; Pablos, 2003; Marr and Adams, 2004). Nevertheless, drawing upon the growing relevance to the relational resources, such as the customer relationships (Dyer and Singh, 1998; Srivastava et al., 2001; Gulati et al., 2002; de Pablos, 2003; Khalifa, 2004; Duparc, 2012; Sussan, 2012) and the social capital (Nahapiet and Ghoshal, 1998; OECD, 2002; Adler and Know, 2002, ADECCO, 2007; Arregle et al. 2007; Zahara, 2010; Still et al. 2013), the present study is mostly focused on the relational capital. “Any company that has clients have capital client” (Stewart, 1999, p.186) states that the main theme of relational capital (RC) is the knowledge embedded in the marketing channels and customer relationships that an organization develops (Bontis, 1998). However, RC cannot be identified only as customer relations but it also must be extended to the relations with all external stakeholders. Recently, the International Integrated Reporting Council (IIRC, Framework, December 2013) proposed a new categorization distinguishing relational capital from social capital. Despite the RC crucial role in firm value creation, it has not been disclosed in the mandatory annual reports or in other stand-alone reports drawn up voluntarily by companies. In response to this gap, the main purposes of the present study are to: 1. investigate how relational capital disclosure (RCD) features in corporate reports, making a distinction between information disclosed in mandatory and voluntary reports; 2. understand how each European listed company, comprised in our sample, may be more or less sensitive to the RCD; 3. look into the influence of specific environmental factors (i.e. typology of legal system); 4. examine the relationship between the RCD and some corporate performance indicators. We carry out a cross-country analysis, through a sample of 80 European listed companies. To be more specific, we considered the following European countries: France, Germany, Italy and the UK. From the methodological standpoint, a content analysis (CA) is performed on the basis of 52 items inherent to RC framework on mandatory and voluntary reports. Then, we build a RCD Index by means of the principal component analysis (CPA) (Jackson, 1991). This disclosure index is used in some bivariate and multivariate statistical analyses, to investigate the following research question, i.e. whether and to what extent, RCD affects the firm growth and performance. In more detail, with reference to the bivariate analyses, we adopt some non-parametric tests (i.e. Kruskal-Wallis and Mann_Whitney) to verify the presence of statistical differences, in terms of specific environmental factors (i.e. typology of legal system) and of sensitivity for the RCD, between the European countries included in our sample. Afterwards, with respect to the multivariate analyses, we run some OLS regression models in which between the independent variables and the dependent one there is a lag of two years. Indeed, the dependent variables refer to the 2013 financial year, whilst the independent ones encompasses the 2011 financial year. In other words, we attempt to examine in depth the influence exerted by RCD on firm growth and performance, in the next two years to 2011 (i.e. relatively to the two-year period 2012-2013). Furthermore, we compute some robustness tests to check the reliability of our findings. In order to explore the research question above mentioned, we formulate some research hypotheses. Each of them seeks to test whether RCD is positively related to some indicators, used as proxies for measuring the firm growth and performance. There are a lot of studies which tried to gauge the quantity and the quality of Intellectual Capital Disclosure (ICD) but, at the same time, there is a growing interest in order to highlight the contribution of ICD and, in particular, of RCD to the firm growth and the financial performance (Luo et al., 2004; Chen et al., 2005; Tan et al., 2007; de Leanize, del Bosque, 2014; Salehi et al., 2014). To this end, the present study could give a useful insight on the current debate about the consequences produced by RC reporting on firm growth and performance. Moreover, in terms of practical implications, it could encourage preparers to improve the disclosure of specific items inherent to the RC. Overall, this empirical study could offer useful suggestions for policy makers, for instance for the European Commission, as it latterly stated new requirements about non-financial information reporting (European Commission, Disclosure of non-financial and diversity information by large companies and groups, Statement 14/124 which amends Directive 2013/34/EU). The sample size represents the main caveat of this study, as the observations amount to 80. Nonetheless, our results could suggest further future researches. Indeed, it could be interesting to include the variable inherent to the directors relation capital, in the items that compose the RCD index. In this way, the index above mentioned covers not only a relevant but also an emergent feature of the corporate governance model. Lastly, it is necessary to extend the cross-country study, in order to encompass other European State Members, as in the previous studies particular attention has been devoted to the emerging and developing economies (i.e. China, India, etc.).
paper
relational capital, firm growth, firm performance, European context, content analysis
English
EIASM 10th Interdisciplinary Workshop on Intangibles, Intellectual Capital and extra financial information
2014
Interdisciplinary Workshop on Intangibles, Intellectual Capital and Financial Information, Ferrara, 18-19 September 2014
2014
1
10
none
Bianchi Martini, S., Corvino, A., Doni, F., Rigolini, A. (2014). The Relational Capital Disclosure in Corporate Reporting: what Consequences for Firm Performance? a Perspective from Europe. In Interdisciplinary Workshop on Intangibles, Intellectual Capital and Financial Information, Ferrara, 18-19 September 2014 (pp.1-10). European Institute in Advanced Studies on Management EIASM.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/57821
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