Abstract
This study explores the effect of intangible assets and sub-components of intangible assets on sustainable growth and firm value in Turkey. The cumulative (i.e., aggregative) value of intangible assets of firms and sub-components of intangible assets were used as test variables in the current study. Further, intangible assets of the firms were divided into three sub-components using the classification of Corrado, Hulten and Sichel, namely computerized information and database, innovative property, and economic competence. Firms listed on Borsa İstanbul were analyzed to test the hypotheses. Two different measures of sustainable growth of firms and unique measure of firm value were used as dependent variables. The final sample includes 1353 observations for nine years between 2005–2013 in Turkey. Ordinary least square (OLS) and Heckman two-stage estimation procedures were employed to test the hypotheses. Estimation results of OLS and Heckman two-stage procedures show that the cumulative value of intangible assets affect the sustainable growth rates of firms and firm value positively. When the cumulative value of intangible assets was classified into three sub-components, both computerized information and database and economic competence impact the sustainable growth rates of firms and firm value.
Highlights
In the literature, there are many definitions of intangibles assets
The mean value of sustainable growth rate 1 (SGR1) is slightly higher than the value for sustainable growth rate which was calculated by Xu and Wang [33] and lower than the value of sustainable growth rate calculated by Feng et al [108]
Especially studies in Turkey, indicate that females at the top management level of firms are more likely to invest in intangible assets, in R&D and the innovative property type of intangible assets [26,27]. (In the current study, the correlation table shows that females at top management level (Top Female Percent) positively and significantly correlated with intangible assets and the sub-components of intangible assets.) These studies assert that females are more innovative than males [99] and they may bring more innovative ideas such as intangible assets to a firm [24]
Summary
There are many definitions of intangibles assets While some of these definitions made by authors refer to one type of specific item among intangible assets (such as brand, trademark, etc.), other authors discuss definitions in a broader context. According to Augier and Teece [4], intangible assets are non-current assets and are different from tangible (physical) assets. These differences are that intangible assets are used by one party, their transfer costs are hard to calibrate, their property rights are limited, and the enforcement of property rights is relatively difficult. Intangible investments made by firms are included in the financial statements of firms as an asset, if firms abide by the IASB’s reporting criteria
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