Civil War, Stock Return, and Intellectual Capital Disclosure in Sri Lanka

This study examines the effect of current-period intellectual capital disclosure on earnings and current annual stock return during a civil-war period. Using the top 30 firms by market capitalization listed on Colombo Stock Exchange over six years (from 1998 to 2003), this study finds that firms do not include the current-period intellectual capital disclosure in the current stock return, and the increase in the current-period intellectual capital disclosure activity has no influence on earnings included in the current stock return. Accounting-based future earnings, if stated in the current period, by contrast are included in the current stock return. The findings provide insights into the intellectual capital disclosure practice and its influence on stock return in a civil-war environment