Intellectual capital disclosure and firm performance in India: unfolding the Fourth Industrial Revolution

Abstract

Purpose

This paper aims to analyze the impact of intellectual capital disclosure (ICD) and its components on firm performance (FP) while discovering the recent Indian ICD trend and pattern.

Design/methodology/approach

Visualizing intellectual capital (IC) through the interpretive lens of the Fourth Industrial Revolution, the study uses agency and signaling theories to elucidate the empirical relationship between ICD and FP of Indian knowledge-sector firms using partial least squares-structural equation modeling (PLS-SEM). Content analysis is used to capture the ICD of 72 NSE-listed firms for five years.

Findings

While revealing an increasing ICD trend, the study confirms that the Indian knowledge sector firms strategically design the component-wise ICD in hierarchical alignment with their value creation. Despite human capital disclosures favorably influencing FP, the overall ICD negatively impacts FP. Structural and relational capital disclosure contribute to this negative relationship due to apprehended loss of competitive advantage.

Practical implications

The paper provides information that may assist companies in identifying the specific intellectual capital components that drive financial performance. We suggest firms be strategically responsive in intellectual capital management and disclosure practices considering the value effect due to transparency and loss of competitive advantage.

Originality/value

Contradicting the scanty literature, this study provides a realistic conclusion to the ICD–FP relationship in alignment with ICD trends. The study contributes to the literature by providing a comprehensive and accurate view of ICD in the study setting through improved ICD framework and methodological advancement. It adds value in the contemporary market where the competition is intellectual capital-driven.

Citation

Singhania, A.K. and Panda, N.M. (2025), "Intellectual capital disclosure and firm performance in India: unfolding the Fourth Industrial Revolution", Journal of Intellectual Capital, Vol. 26 No. 2, pp. 380-403. https://doi.org/10.1108/JIC-05-2024-0145