Exploring the Relevance of Intangible Assets and Capital Structure

Abstract

With the rapid development of technology, intangible assets play an increasingly important role in company nowadays. In the past, the reason why intangible assets were less used by companies as financing tools is largely because intangible assets have higher risks than tangible assets. This study focuses on publicly listed companies in Taiwan from 2013 to 2019 as the research object, and primarily explores whether intangible assets can be used as a company's guarantee, financing, and mortgage tool, and whether intangible assets will affect the composition of companies' capital structure. The empirical results showed that intangible assets have significant positive correlation with the company’s capital structure, indicating that intangible assets can be an additional choice to companies as a financing tool when companies face financial difficulties. Therefore, in the era of knowledge economy, intangible assets are like tangible assets that can be used as collateral for loans.