Intellectual Capital Reporting: Evidence From The Banking Industry In Sri Lanka

Abstract

Intellectual capital (IC) is recognized as a strategic asset which gives competitive advantages by driving organizations for superior performance in the modern day knowledge-based economies. Arguably, the selection of IC reporting as the phenomenon for the study was mainly due to its high sensitiveness for the business excellence in the knowledge-based economy. The objectives of the study are to explore the extent of IC reporting and recent developments in IC reporting of selected commercial banks in Sri Lanka. The study is based on data drawn from five firms in the banking industry namely, Commercial Bank Ceylon Plc, Hatton National Bank Plc, Bank of Ceylon, Sampath Bank Plc and People’s Bank for the period of 2006 to 2009. The data for the study has been collected from published annual reports of the selected firms and analyzed using the developed IC reporting index for the study based on Pablos (2002) and Abeysekera (2007). Findings of the study show that there are different levels in IC reporting of selected firms, and concludes that there is no discernible pattern in IC reporting in case organizations over the time horizon selected for the study. The study contributes to the IC literature by providing evidence for IC reporting in the context of an Asian organizational setting as summons in Pablos (2002). Moreover, the findings enable organizations in Sri Lanka to evaluate their level of IC reporting though the generalizability of findings of this study to other organizations is restricted by the approach to this study.