TIME-SERIES CROSS-SECTION ANALYSIS OF THE EFFECT OF INTELLECTUAL CAPITAL DISCLOSURE ON MARKET VALUE OF LISTED FIRMS IN NIGERIA

The aim of this study is to examine the impact of intellectual capital (IC) disclosure on market value of listed firms on main board of Nigerian Stock Exchange. This study applies the signalling theory in formulating hypothesis that guides the result analysis. Using content analysis of sampled 30 most capitalised firms, the study generates IC disclosure scores from annual reports. IC is surrogated with human capital, process capital, customer capital, innovation capital and protected capital while the study adopted market capitalization as a proxy of corporate market value. Using ordinary least square method, this study longitudinally examined the relationship between quality of IC disclosure and market capitalization using data over the period of 2011 to 2012 financial years. The result shows a significant positive association between overall IC disclosure and corporate market value of listed firms in Nigeria. Hence, the study recommends that management should be concerned with the adequate disclosure of IC related information as it affects the capital market activities and investors investment decisions.