Intellectual capital and analyst forecast: evidence from the high-tech industry in Taiwan

This article investigates the relation between the disclosure of intellectual capital and analysts' forecasts based on the Taiwanese high-tech industry. We hypothesize that corporate disclosures can be important means for management to communicate firm performance to outside investors and the firms that provide extensive coverage of intellectual capital can reduce the information risk in analysts' forecasting process. We find that firm-specific disclosures of intellectual capital relates negatively with analysts' forecast errors and dispersions. While many companies are concerned that the disclosure of intellectual capital can damage their competitive position in product markets, our results suggest that firms can reduce the information risk with voluntary disclosures on intellectual capital.intellectual capital, analyst forecast, information risk, high-tech industry,