The impact of intangibles on firm growth

Abstract

This study investigates and measures the impact of intangibles on firm growth. We distinguish between internally and externally generated intangible assets and analyse the role played by firm size, measuring if it can alter the relationship between intangibles and performance. In doing so, we combine the resource-based view of the firm -as a cornerstone for this survey -with accounting principles. In particular, we focus on intangible 'assets' recorded in firms' books according to international accounting standards. The empirical analysis explores a proprietary database of 294 listed companies headquartered in Europe. Findings confirm that intangibles are crucial in fostering firm performance, show that this effect varies with firm size and that an additional boost is created by externally generated intangibles.

Intellectual capital and organizational effectiveness: PLS-SEM approach

“…Structural capital consists of organizational abilities, culture, processes, patents, trade marks, databases, etc. (Denicolai et al, 2015). It includes the knowledge that remains in the company after employees leave (St-Pierre& Audet, 2011).There is an interdependence between human capital and structural capital in the intellectual capital creation process (Cabrita& Bontis, 2008).…”

Compliance with intangible assets disclosure requirements: study of Portuguese non-financial companies

“…In larger companies, listed on more than one stock exchange market and with audited accounts by one of the Big Four auditing firms, there is a higher level of compliance with IAS requirements. Denicolai, Ramusino, and Sotti (2015) examined the effects of intangibles on firm growth in 294 European listed companies and concluded that intangibles are "crucial in fostering firm performance". This effect is likely to be stronger if externally generated intangible assets are used, and firm size appears to be a determinant factor.…”

Intellectual Capital and Firms’ Financial Performance: A European Empirical Study‬‬‬‬

“…Despite various studies that show a positive and significant effect of IC on firms" financial performance (FP), using VAIC™ as a IC measure of the efficiency of IC, there are contradictory results, which may be attributed to countries or industry specificities (Bontis, 1998;Chen et al, 2005;Denicolai et al, 2015;Nimtrakoon, 2015;Tseng et al, 2013;ul Rehman et al, 2011). Results from Riahi-Belkaoui (2003) indicate positive relationship between IC and FP.…”

“…This innovative capacity allows firms invest in their core competences, which are not easy imitable by competitors (Prahalad & Hamel, 1990;Seyoum, 2004). Various studies show the positive contribute of IC to firms" financial performance and market value (Ballester, Garcia-Ayuso, & Livnat, 2003;Bontis, 1998;Chan, Lakonishok, & Sougiannis, 2001;Chen et al, 2005;Denicolai, Ramusino, & Sotti, 2015;Nimtrakoon, 2015;Tseng, Lan, Lu, & Chen, 2013;ul Rehman, Ilyas, & ur Rehman, 2011;Xing, 2014). Moreover, the intangible assets have been pointed out as an explanation for the disparity between firms" book value and market value (Lev, 2004).…”

“…This is the individual"s knowledge that doesn"t belong to firms and that employees take with them when they leave the organization. SC comprises the firms most valuable strategic assets, such as, organizational capabilities, culture, processes, patents, copyrights, trademarks, databases, and so on (Denicolai et al, 2015;Janosevic & Dzenopoljac, 2012;Johnson, 1999). The RC is the knowledge obtained through the establishment of relationships with external stakeholders (Johnson, 1999;Kweh, Lu, & Wang, 2014;Yu, Wang, & Chang, 2015).…”