Author(s)

YiRu Yang

Affiliation(s)

School of Accounting, Guangzhou College of Commerce, Guangzhou 511363, Guangdong, China.

Corresponding Author

YiRu Yang

ABSTRACT

This paper examines whether the management attitude towards economic uncertainty affects the value relevance of intellectual capital (IC) and how management attitude towards economic uncertainty influences investors’ perception of future earnings generated by IC.  Content analysis of 318 annual reports of Australian firms listed on the Australian Securities Exchange (ASX) is used to obtain information on IC and management attitude. T-tests and ordinary least squares (OLS) regressions are used to examine the hypotheses. This study finds that during the economic uncertainty period, the investors incorporate future earnings generated by IC to stock returns only when firms show an optimistic attitude towards the economic uncertainty. The results suggest that investors’ perceptions of future earnings generated by IC depend on the firm’s attitude towards the economic uncertainty.

KEYWORDS

Intellectual capital; Value relevance; Signalling theory; Management attitude; Economic uncertainty

CITE THIS PAPER

YiRu Yang. Does management attitude towards economic uncertainty influence the value relevance of intellectual capital?. Trends in Social Sciences and Humanities Research. 2024, 2(9): 15-25. DOI: https://doi.org/10.61784/tsshr3085.

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