The extent of disclosure on implicit capital and firm's characteristics: Malaysian experience

We conduct a study based on disclosure index constructed on implicit capital. Very limited studies have been reported in this segment. The study explores whether the firms are truly revealing those information that are likely to be contributing to the growth and survival of the firm. The sample consists of 114 companies belonging to various industry segments, listed on Malaysian Bursa Stock Exchange, in 2012. Twenty factors are identified that are responsible for keeping the firm competitive. Six hypotheses are built up and are tested using, OLS, stepwise and rank regressions. We find no impact of independent directors, size of the firms as also market performance of the firm, on the quality and quantity of disclosure, but find profitability and good performance of the management of the firms are important factors for higher disclosure, while leverage induces a very low positive impact on disclosures of information on implicit capital.