An Exploration of Intellectual Capital Disclosure Practices Amongst Non-Financial Listed Companies in Saudi Arabia

  • Fahad Alrobai

Student thesis: Doctoral ThesisDoctor of Philosophy


Intellectual capital (IC) is a concept that has emerged in the knowledge era and that plays a crucial role in the process of wealth creation. Companies need to rely more on their IC resources than on their tangible assets to enhance their value. Prior research has extensively examined the level of IC through the use of content analysis, with a greater emphasis on cross-sectional breadth than longitudinal depth. In addition, most of the extant literature focused on developed countries, while only a small number of studies have explored intellectual capital disclosure (ICD) in developing countries. Consequently, this study seeks to contribute to the ICD literature by providing evidence based on data collected from a geographical area previously overlooked by the research community.

The purpose of this study is to investigate the ICD practices of selected non-financial companies listed on the Saudi Stock Exchange over a longitudinal period and to ascertain the perspectives of a cross-section of top management on this phenomenon in Saudi Arabia. Content analysis and semi-structured interviews were used as data collection methods. The first method used was content analysis to determine the level and volume of ICD practices. The data were gathered from the annual reports, published from 2008 to 2018, of eight non-financial companies listed on the Saudi Stock Exchange (Tadawul), representing the market’s largest firms. Then, semi-structured interviews were conducted with 29 members of top management of the same companies to ascertain their perspectives on ICD, including their perspectives on the motivations for and constraints of disclosing IC information. The study’s findings were interpreted through the lens of legitimacy and signalling theories.

The results of the content analysis show that satisfactory levels of ICD practice existed throughout the studied period. Additionally, ICD, as measured by sentence frequency, increased over the period of the research. The results further indicate that the highest level of disclosure about IC was associated with relational capital (RC). Structural capital (SC) was the second most frequently reported category, with the least reported category being human capital (HC). Regarding IC items, the best performing item during the study period was management processes, while the lowest performing IC item was related to intellectual property.

Nonetheless, the results of the interview analysis indicate that HC may have a positive effect on value creation. The top managers’ perspectives on motivations for ICD were to improve the company’s image and reputation, and the board of directors’ and CEO’s mindset on the importance of disclosing IC information. Top managers, on the other hand, considered the latter to be one of the most difficult barriers to revealing IC information. Moreover, top managers’ views regarding the effects of external factors on ICD practices show that new policies and regulations implemented in the Saudi environment have a beneficial effect on boosting ICD levels.
Date of Award2022
Original languageEnglish
SponsorsKingdom of Saudi Arabia & Majmaah University
SupervisorAlison Fordyce (Supervisor) & Gizella Marton (Supervisor)

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