2023 PUBLICATION

EFFECT OF INTELLECTUAL CAPITAL DISCLOSURE ON COST OF CAPITAL OF LISTED MANUFACTURING COMPANIES IN NIGERIA

Abstract

Intellectual capital is recognized as a crucial driver of value creation and competitive advantage in organizations. However, the relationship between intellectual capital disclosures and the cost of capital remains relatively unexplored, particularly in the Nigerian context. Therefore, this  study examines the effect of intellectual capital disclosure on the cost of capital of listed manufacturing companies in Nigeria. The research adopts an ex post facto design and includes a sample size  of 43 manufacturing firms listed on the Nigerian Exchange Group (NGX) as of December 31, 2021. Data for the study are  collected from secondary sources, specifically the Published Audited Annual Reports and Accounts of the selected manufacturing firms. The research utilizes panel regression analysis as the data analysis technique, The findings of the study reveal a significant positive relationship between intellectual capital disclosure and the cost of capital for listed manufacturing companies in Nigeria. Based on the conclusion, it is recommended that regulatory authorities, such as the Securities and Exchange Commission, should take an active role in promoting intellectual capital disclosures. This can be achieved by providing clear guidelines and standards for reporting and disclosing intangible assets. 

Keyword: cost of capital, intellectual capital disclosure, firm size, leverage.  

Authors:

Achem Yakubu

Prof. S.A.S Aruwa

Dr. Ismaila Olotu