Volume 21, No. 2, 2024
Influence Of Political Ties On The Link Between Board Attributes And Intellectual Capital Reporting
Belal J. Zidan , Professor. Doctor. Wan Fadzilah Wan Yusoff , Assoc. Professor. Doctor. Abu Sofian Yaacob , Dr. Mahmoud Abdelrehim
Abstract
In the contemporary knowledge-based economy, organizations increasingly rely on intellectual capital, shifting away from traditional asset structures towards intangible assets. Traditional accounting standards and financial statements have inadequately provided non-financial data crucial for stakeholders, investors, and creditors. This gap has driven researchers, particularly in developed countries, to emphasize intellectual capital (IC) disclosure, given that conventional financial reports and accounting standards do not adequately address IC. Prior studies have predominantly used descriptive approaches to study IC disclosure, with few investigations examining the impact of board characteristics (BCs) on IC disclosure in developing countries. These limited studies have yielded mixed results concerning the relationship between BCs and IC disclosure. In developing countries, political influence plays a significant role, impacting the economic landscape. Companies often view political connections (PCs) as vital external resources to reduce capital costs and affect voluntary disclosure. This study diverges from the mainstream literature by not only exploring the direct relationship between BCs and IC disclosure but also examining the moderating effect of PCs on this relationship. Thus, the objective of this study is to establish a theoretical framework grounded in Agency Theory and Resource Dependence Theory to investigate the moderating role of political connections on the relationship between board characteristics and intellectual capital disclosure in developing countries.
Pages: 198-206
Keywords: Intellectual Capital, Board Characteristics, Political Connections, Voluntary Disclosure, Agency Theory, Resource Dependence Theory, Developing Countries, Corporate Governance, Intangible Assets, Financial Reporting.