Intellectual Capital as a Mechanism for Generating Institutional Trust in Emerging Financial Markets: A Comparative Philosophical Study of the Epistemic Structure of Arab Disclosure

Abstract

Abstract : This study explores the role of intellectual capital (IC) in generating institutional trust within Arab emerging financial markets through an integrated quantitative–philosophical approach. It assumes that institutional trust is not merely a result of procedural transparency or compliance with international standards but is rather produced through value-based and knowledge-driven disclosure that reflects an organization’s authentic identity and ethical intent.
Data from fifty listed companies in four Arab emerging markets (Saudi Arabia, Egypt, Jordan, and Bahrain) covering 2021–2024 were analyzed using Structural Equation Modeling (SEM) to examine the relationships between IC disclosure and its components (human, structural, and relational capital) and institutional trust, incorporating value-based disclosure and ethical culture as mediating and moderating variables.

The results reveal a strong positive association between IC disclosure and institutional trust (β = 0.64, R² = 0.67), with value-based disclosure acting as a cognitive–ethical mechanism that amplifies this effect. The findings demonstrate that Arab markets tend to build trust through ethical transparency rather than procedural transparency, positioning intellectual capital as a symbolic structure for re-legitimizing organizations.

The study proposes an Arab Value-Based Disclosure Framework that integrates global standards with local moral heritage and suggests policy directions to enhance public trust and financial sustainability. The originality of this work lies in its fusion of statistical rigor with philosophical interpretation, presenting an Arab epistemic perspective in which intellectual capital becomes a language of trust and a medium for institutional legitimacy reconstruction in emerging economies.

Keywords:
Intellectual capital; Institutional trust; Value-based disclosure; Emerging financial markets; Structural equation modeling; Arab disclosure; Symbolic legitimacy.