The Effect of Intellectual Capital Disclosure on Market Value of Listed Companies in Nigeria

Abstract

This research examines the intellectual capital (IC) disclosure’s effect on the market value of the companies listed on Nigerian Stock Exchange’s main board. The hypothesis for the study is formulated using signaling theory. Using content analysis of sampled 30 most capitalised firms, the study generates IC disclosure scores from annual reports. IC is surrogated with customer capital, protected capital, human capital, innovation capital and process capital, while corporate market value is proxied with market capitalisation. This study longitudinally examined the connection between market capitalisation and IC disclosure quality using data between 2016and 2019 financial years based on ordinary least square method.The result shows that the listed companies’ corporate market value and the overall IC disclosure are significantly and positively correlated. The study recommends that managers should disclose adequate information on IC because of its influence on investors’ decisions and activities at capital market.