Chinese and English language versions: intellectual capital disclosure

Abstract

Purpose – The paper of this paper is to assess the extent and quality of IC disclosure in the Chinese and English language versions of the annual reports of 50 Chinese companies which are dual listed in both Chinese Mainland and Hong Kong stock markets.

Design/methodology/approach – An IC disclosure index is constructed. Content analysis is used to code the 100 annual reports in accordance to a five-point scale.

Findings – The Chinese version annual reports disclose more internal capital than the English versions, yet the English versions showed greater external capital. There was found to be a strong relationship between type of industries, the size of companies and the level of IC disclosure.

Research limitations/implications – The paper only examines one year's annual reports of the top 50 Chinese companies by market capitalisation.

Practical implications – It is hoped that by highlighting the IC disclosure of companies in China this will raise the level of debate around this issue and will lead to greater disclosure transparency of company reporting.

Originality/value – This is the first research study that compares the IC disclosure in different language versions of annual reports of Chinese companies as well as testing for the effects of company characteristics. It is also the first study that uses three different weighting methods to measure disclosure quality.