Abstract
Purpose The intangible assets of a company have been presented by national and international surveys as a resource to influence the creation of value and the increase in organizational performance. In view of this, this study aims to analyze the relationship between intangibility and the performance of companies in Latin America. Design/methodology/approach For this purpose, multiple regression with panel data was used and three perspectives for measuring intangible resources were defined: representativeness of the intangible asset, accounting measure for measuring the intangible, degree of intangibility and Tobin’ Q, the latter two representing economic and financial measures to determine intangibility. The study covered the period from 2011 to 2017 with a sample of 1,236 publicly traded companies located in some Latin American countries, namely, Argentina, Brazil, Chile, Colombia, Mexico and Peru. Findings The results demonstrated the existence of a significant and positive relationship between the variables of intangibility, degree of intangibility and Tobin’s Q, and the performance variables, return on assets, operating margin and asset turnover, reinforcing the study hypothesis that the greater the investment in intangible resource, the greater the company’s performance. Research limitations/implications The limitations of this study involve the lack of complete information about intangible resources in the financial statements of some companies and some countries, making it hard to analyze the proposed relationship more broadly and accurately. Another limitation involves the causal relationship that may have existed between the regressors of the models defined in the study and their error, thus generating an endogeneity problem in the proposed models. It is recommended for future research to use specific methods to mitigate possible problems of endogeneity in regressions. Practical implications Mainly the possibility of deepening the relationship between intangibility and business performance, thus obtaining new knowledge through the reflexes of this relationship on companies in Latin American countries, finding more consistent results. Social implications The study contributes to the decision-making process in the business world by informing the primary users of accounting information such as investors, administrators, accountants, regulators and creditors. Originality/value This research contributes by addressing a theme whose studies present many gaps, making it possible to deepen the relationship between intangibility and business performance and gain new knowledge through the reflexes of this relationship on companies in Latin American countries.
Highlights
Better results regarding organizational performance are associated with technical evolution, innovation and the quality of human, structural and relational factors
The results demonstrated the existence of a significant and positive relationship between the variables of intangibility, degree of intangibility and Tobin’s Q, and the performance variables, return on assets, operating margin and asset turnover, reinforcing the study hypothesis that the greater the investment in intangible resource, the greater the company’s performance
The results showed that the sample data does not follow a normal distribution when rejecting its null hypothesis
Summary
Better results regarding organizational performance are associated with technical evolution, innovation and the quality of human, structural and relational factors. These factors are strongly influenced by investment in education, research and development – in short, knowledge and intellectual capital management (Moura, Theiss, & Cunha, 2014; Moura & Varela, 2014; Gogan, Artene, Sarca, & Draghici, 2016; and Xu & Wang, 2018). Nascimento, Marques, Oliveira and Cunha (2012), Kreuzberg, Rigo and Klann (2013), Miranda, de Vasconcelos, da Silva Filho, dos Santos and Maia (2013), Luca, Maia, Cardoso, Vasconcelos and Cunha (2014), Vogt, Kreuzberg, Degenhart, Rodrigues and Biavatti (2016) and Ritta et al (2017) did not find that greater intangibility is related to greater profitability of companies
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