Title: IPO prospectus: exploring the expectation gap on intellectual capital information

Authors: Shaw Warn Too; Chee Kwong Lau; Wei Qi Kek

Addresses: Nottingham University Business School, University of Nottingham Malaysia, Jalan Broga, 43500 Semenyih, Selangor, Malaysia ' Nottingham University Business School, University of Nottingham Malaysia, Jalan Broga, 43500 Semenyih, Selangor, Malaysia ' Nottingham University Business School, University of Nottingham Malaysia, Jalan Broga, 43500 Semenyih, Selangor, Malaysia

Abstract: This study explores the preparers' and users' views on the decision usefulness of intellectual capital (IC) information in the prospectuses of firms undergoing listing for the first time ('IPO firms') in the Malaysian securities market. In addition, the categories of IC information (i.e., external, internal and human capital) in relation to specific industry sectors are considered. Questionnaire survey forms were distributed to 126 respondents who comprised preparers and users of initial public offering (IPO) prospectuses. Both parties considered IC information as useful for decision-making and external capital was considered the most important category of disclosure. Preparers were willing to supply IC information in the prospectus and users indicated that they intended to use it for decision-making. However, there was a major mismatch in the supply and demand of IC information by category in IPO issues in some industry sectors suggesting the existence of an information asymmetry gap between preparers and users.

Keywords: intellectual capital; external capital; internal capital; human capital; IPO; initial public offering; prospectus; Malaysia; perceptions; information gap.

DOI: 10.1504/IJLIC.2019.100538

International Journal of Learning and Intellectual Capital, 2019 Vol.16 No.3, pp.254 - 273

Received: 08 Jun 2018
Accepted: 17 Oct 2018
Published online: 29 Jun 2019 *

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