Determinants of intellectual capital reporting : Evidence from annual reports of Malaysian listed companies

Purpose – The objective of this paper is to examine the determinants (i.e. firm size, profitability, leverage, type of audit firm and industry type) of intellectual capital (IC) disclosure in the annual reports of Malaysian listed companies. Design/methodology/approach – The data were collected from the 2006 annual reports of the selected listed companies; and analyzed using descriptive statistics, t‐test, correlation and regression analyses. Findings – The paper found that firm size, profitability, industry type are determinants of IC disclosure (ICD) in the annual reports of Malaysian listed companies, while leverage and type of audit firm did not statistically influence ICD. Research limitations/implications – The paper only used data from the 2006 annual reports. However, the findings have highlighted the importance of ICD determinants based on data from an emerging economy (i.e. Malaysian economy). Practical implications – The paper provides empirical evidence on the current practices and determinants of ICD in the annual reports of the Malaysian listed companies. This evidence would help in understanding and determining factors that influence the extent of ICD. Subsequently, it could assist in enhancing ICD in the annual reports. Originality/value – The paper contributes by extending the limited ICD literature in Malaysia. Furthermore, the paper has tested more determinants, deemed to influence ICD, compared to prior Malaysian studies. In addition, the paper used a larger sample size with a wider industry coverage compared to previous Malaysian literature.