| This research examines the Intellectual Capital Disclosure (ICD) in the latest annual reports of 43 Canadian publicly traded software companies. Two questions are answered: What are the amounts and types of ICD in the Canadian software sector? What factors explain different types of ICD reporting behavior? Although the questions are similar to previous IC studies, this paper contributes in two ways: it examines Canadian publicly traded software firms and investigates more variables on ICD reporting behavior. It is important to understand how much ICD is disclosed and when, because IC not only provides relevant information to outsiders to understand how organizations' resources create value in the future, but IC can also be used as an internal management tool. Data are collected by content analysis of annual reports. Multiple-regression is used to test the model ICD = f (firm size, age, growth rate, gross margin, the ratio of R&D expense, the ratio of shareholders' equity, insider-holding rate). The results are applied to explain what factors have impacts on ICD reporting behavior. Regarding the first question, on average the Canadian software firms report 11 of 24 ICD indicators. For the second question, the regression suggests that a company's size and insider-holding rate influence ICD reporting behavior. Compared to previous studies, the results imply that ICD by Canadian traded software firms is slightly lower than the ICD reported by companies in other countries. Only two of the explanatory variables in the model are associated with ICD thus, future research should investigate additional factors to explain ICD. |
