Bridging the gap between disclosure and use of intellectual capital information

Purpose - The objective of this paper is to examine the information regarding intellectual capital disclosed to financial analysts and to study if this data is finally considered in their decision-making process. Design/methodology/approach - The database consists of 257 reports of presentations held by Spanish companies and 217 analyst reports issued during 2000 and 2001. The paper shows that information related to intellectual capital is widely reported to financial analysts and that they use it in their decision making process. Findings - The findings show that some of the items most frequently disclosed in the meetings and considered in valuation tasks are related to coherence and credibility of strategy, alliances, or leadership. Nevertheless, the comparison shows that the disclosure on intangibles is higher than the level of this information included in the analyst reports. This paper contributes to three streams of literature. The first is the literature on intangible assets, to which we contribute by providing evidence of its disclosure through direct contacts. The second is the literature on analyst valuation, to which we contribute by increasing understanding of the role of intellectual capital in the decision-making process of financial analysts. Finally, by comparing the results, we test the differences in the focus on intangibles between the main parties involved in the information flow: the discloser and the user of the information. Originality/value - The analysis of non-financial information currently reported in private channels and used by financial analysis may be of interest to policymakers or regulators in the setting of mandatory disclosure requirements regarding intangibles.