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Purpose This paper aims to study the relationship between intellectual capital disclosures (ICDs) and the relative importance of intangible assets as company value drivers. Design/methodology/approach Annual reports of Swedish, British and Danish firms are analysed to measure the extent of ICD. The level of intellectual capital (IC) in firms, measured with proxies for the categories of human, structural and relational capital. Findings As to the components of IC, the empirical results indicate that there is a strong significant positive relationship between (the level of) structural capital possession of a firm and the firm's ICD. Practical implications This suggests that firms with a relatively high level of structural capital, disclose more information on IC in the annual report. The study found no such significant association between human and relational capital in firms and ICD regarding these items. Firms might have a transparency drawback in addressing these issues in the reports when these IC categories are relatively of greater importance for firms. Originality/value The paper provides evidence for the argument that firms focus their ICD on those IC elements that are most relevant for the company's value creation process.
Vergauwen et al. (Sat,) studied this question.