Intangible-Driven Value Creation: Supporting and Obstructing Factors

Abstract

This study investigates the factors that support or obstruct market value creation through intangible capital. We explore the impact of intangibles and exogenous shocks on corporate attractiveness for investors measured by Market Value Added (MVA). Specifically we analyze relationship between intangible-driven outperforming of companies, measured by Economic Value Added (EVA) and a number of intangible drivers on macro, meso and micro level. We suppose that the process of value creation is confined not only by companies' performance. It is established in our study that investment attractiveness is affected by intangibles. Our empirical research is conducted on more than 900 companies from Europe and US during the period of 2005-2009. We found out in this study that a company's experience, size and innovative focus facilitate value creation. An unexpected result was revealed concerning countries' education level, which appears to be an obstructive condition for intangible-driven value creation. Our findings extend the understanding of the phenomenon of intangible capital and enable the improvement of investment decision-making.JEL Classification: G 30, M21.

The drivers of profitability in the top 30 major airlines worldwide

“…Shakina and Molodchik (2014) confirmed that the individuality of a company plays a considerable role in the effective use of intangible capital.…”

“…Dependent on accounting rules, several studies (Moeller, 2009;Zéghal and Maaloul, 2010;Kianto et al, 2013;Tsai et al, 2013b;Salchi et al, 2014;Shakina and Molodchik, 2014;Tudor et al, 2014;Vallejo-Alonso et al, 2015) have identified and measured the impact of intangibles on value-creation and performance in business.…”

“…However, Schiuma et al (2008) (Marr et al, 2004;Zéghal and Maaloul, 2010;Kianto et al, 2013;Salchi et al, 2014;Tudor et al, 2014;Shakina and Molodchik, 2014 Share (EPS) in order to capture the impact of intangibles on performance. However, the results do not converge to produce a positive association between intangible factors and performance.…”

“…There are other approaches to identifying the positive relationship between intangibles and performance, but they all take a similar position as to the positive effect of intangibles. Based broadly on intangible assets and intellectual capital, all approaches have contributed greatly to the corpus concerning intangibles and profitability (Hall, 1992;Roos et al, 1997;Lev, 2001;Marr et al, 2004;Tsai et al, 2013a;Kianto et al, 2013;Kommenic et al, 2013;Salchi et al, 2014;Shakina and Molodchik, 2014;Tudor et al, 2014).…”

“…The topic of intellectual capital (Roos et al, 1997;Schiuma et al, 2008) is not new and several and structured researches have been concluded over the last decades (Marr et al, 2004;Zéghal and Maaloul, 2010;Kianto et al, 2013;Salchi et al, 2014;Tudor et al, 2014;Shakina and Molodchik, 2014). The search of new metrics and approaches towards the capture of the intangible side of organizations has driven the efforts to improve the comprehensiveness how firms manage their sources of value and improve profitability towards a sustainable financial and strategic positioning.…”