Proceedings

source of rich data, it is labour intensive and time consuming methodology (Boesso
and Kumar, 2007; Striukova et al. 2008). As such, it is fairly common to find a
relatively small sample size in studies using this methodology
2.4 Methodology used for the analysis of the determinants of ICD
In order to analyse the determinants of ICD, we constructed an IC disclosure index
(ICD_Index) for each company which had a common base containing the 33 IC items.
In constructing the disclosure index, dichotomous scoring for each of the 33 IC items
was used (disclosure =1, non-disclosure =0). Hence, the maximum possible score
attainable by a company was 33 with a minimum theoretical score of 0. Furthermore,
ICD_Index is used to test (through descriptive statistics, T test, Pearson correlation and
multiple regression analysis) whether certain factors such company size and industry
type influence ICD.
2.4.1 Measure of ICD_Index (dependent variables)
Based on the total of the 33 IC items, we are constructing a weighted disclosure index
calculated in accordance with the following formula:
n
∑
i=
1
ICD_Index = ( di / M ) x100
percent
Where ICD_Index is the disclosure index dependent variable, di expresses item i
when the item’s value is 1 with disclosure and 0 when there was no disclosure, and M
is 33 (the total number of items being measured).
2.4. 2 Measure of company size and industry type (independent variables)
This section describes how the independent variables are measured.
Size: Researchers have commonly used different measures such as sales, revenue,
asset, and number of employees, as proxies for company size. Alternative proxies of
firm size include total assets (Oliveira et al., 2006; Bruggen et al., 2009); turnover
(Bozzolan et al., 2003; Bozzolan et al., 2006; Oliveira et al., 2006); market
capitalization (Garcıa-Meca et al., 2005; Oliveira et al., 2006; White et al., 2007;
White et al., 2010); and number of employees (Oliveira et al., 2006; Boesso and
Kumar, 2007; Huang et al., 2010). While market capitalization is a market-related
characteristic, the other three proxies are structure-related characteristics. For our
study we shall use as a proxy the company turnover (sales) for the year ending 31
December 2009 as we consider turnover to give us the market share no matter what
market one may refer to. Total assets are not that relevant unless comparison is made
within the same industry; the number of employees is less relevant as there industry
types that can be more labour intensive than other. For the purposes of our study, size
is measured as the natural logarithm of the firm’s sales taken from annual reports as of
31 December 2009.
Industry type: To capture the influence of industry on the voluntary disclosure of
intangibles information, we use a dichotomous variable (applying 1 for firms
belonging to high intangibles intensive industries; and 0 otherwise). Similar to other
studies in this area, we separate between traditional industries such as food,
automobiles, chemicals, construction, electronics, manufacturing, oil, utilities,
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