Determinants of Intellectual Capital Disclosure:Evidence from Indian Banking Sector

The intellectual capital disclosures of banks in India are largely unexplored in spite of the growing relevance of banks in the Indian economy. The study attempts to explain the extent of Intellectual Capital Disclosure (ICD) by Indian banking sector, and to examine the relationship of ICD with nine independent variables. The extent is studied by calculating an index for disclosure and multiple regression model is applied to examine its relationship with independent variables, namely: bank size, bank risks, efficiency, bank age, human capital pressure, ownership pattern, leverage level, structural complexity and board composition. The results reveal that there is no clear pattern of ICD in Indian banking sector. ICD is influenced by size, risk, human capital and board composition. The study concludes that banks in India must improve on ICD practices, as these disclosures will reduce information asymmetry between insiders and other stakeholders and make capital markets more efficient.