The invisible value: intellectual capital disclosure in the age of sustainability reporting

In an era where intangible assets increasingly drive corporate value, intellectual capital has become a key determinant of long-term sustainability and financial stability. This study investigates the relationship between intellectual capital disclosure (ICD) and firm-level financial risk, as measured by the Altman Z-score, with a focus on Human, Relational, and Structural Capital dimensions. The empirical analysis is based on a panel of 539 firm-year observations from Italian small and medium-sized enterprises (SMEs) over the period 2019–2024. Data was extracted from Refinitiv Eikon. Using linear regression models that control for firm- and time-specific effects, the results indicate that Structural and Relational Capital disclosures significantly reduce perceived financial risk, whereas Human Capital disclosure has a limited direct effect. These findings highlight ICD as a strategic signalling mechanism that complements traditional financial indicators, enhancing transparency, stakeholder confidence, and long-term resilience.