"Business Models, Intangibles, and Firm performance"

Abstract

This paper contributes to the growing literature on Business Models (BM) and Corporate Entrepreneurship by examining the impact of BM changes and investments in intangibles on performance in a sample of 376 small and medium-sized Italian enterprises (SMEs) over the period 2000–2010. We compare firms that continue to be managed through the existing BM with matched firms that have changed their BM, by taking into account the complementary role of intangibles assets accompanying the BM change. We find that a modification of the BM has a positive effect on the ability of the firm to perform well when performance is measured by growth of sales and profitability; no significant effect is found in the case of productivity. Intangibles also show a significant impact on performance, but only when efficiency (total factors productivity) is used to measure the performance. The evidence of a complementary impact of BM and Intangibles is confirmed in the case of sales growth and productivity, as companies that have linked a BM modification to an investment in intangibles are better performers than those that have not.