The Impact of Intellectual Capital Disclosure on Market Value: An Empirical Study on Jordanian Pharmaceutical Manufacturing Companies Listed in Amman Stock Exchange

Abstract

The aim of this study was to explore the extent to which Jordanian pharmaceutical manufacturing companies disclose information on their intellectual capital components (human capital, structural capital, and relational capital), and its impact on companies' market value, as measured by return on assets and rate of annual trading value. Content examination of annual reports was used to assess the extent of intellectual capital disclosure. The impact of disclosure was analyzed using regression analysis. All public shareholding pharmaceutical manufacturing companies listed in Amman Stock Exchange from 2007 to 2012, which comprised 6 companied, were included in the study. The results revealed that the disclosure of intellectual capital components have a significant impact on companies' market value. Hence, pharmaceutical companies are required to pay more attention to extend their disclosure of intellectual capital elements, and to adopt new strategies that intensify investments in intangible assets.