THE EFFECT OF MULTINATIONAL UNDERWRITING FIRMS ON INTELLECTUAL CAPITAL DISCLOCURE IN INDONESIAN
Dezie L. Warganegara
BINUS Business School-BINUS University
Jl. Hang Lekir I No. 6 Jakarta, 12120
Telp. +62 21 720 2222; Fax. +62 21 720 5555
The objective of this study was to investigate the effects of multinational underwriters on intellectual capital disclosure in Indonesian IPO prospectuses. Intellectual capital disclosure practices were driven by the advice of underwriters. Multinational underwriters had a greater capacity to produce more relevant information so it reduced the information gap for IPO market participants. The information included IC disclosure practices in IPO prospectuses. This study found that the nationality of underwriting firms positively affected the extent of intellectual capital disclosure in Indonesian IPO prospectuses. Exposure to IPOs in other countries and the ability to combine dispersed knowledge across their international branches seemed to have a positive effect on multi-national underwriting firms in as much as it led to a higher standard of disclosure of intellectual capital than that of local underwriting firms.
Key words: intellectual capital disclosure, IPO, prospectus, multinational underwriter