Intangible Investment Research Articles

Assets Composition and Financial Performance of Listed Consumer Goods Firms in Nigeria

This study investigated the effect of asset composition on financial performance of listed consumer goods companies in Nigeria from (2012-2021). three research questions and corresponding three hypotheses were formulated for the study. Ex-post facto research design was employed in the study. The population of the study included all consumer goods manufacturing firms quoted on the Nigerian Exchange Group (NXG) (NSE) as at 31st December 2022 with a sample size of Twenty-nine (29) consumer goods manufacturing companies selected from the population sector. The study relied on secondary sources of dataset which was obtained from Annual reports of sampled companies as provided by individual companies, Nigerian Exchange Group (NXG) website and Machame Database (www.machameratios.company.site). Amongst other preliminary analysis and tests, the panel least square regression analysis was done in validating the hypotheses. The study found that property, plant and equipment have positive and significant effect on the performance of quoted manufacturing companies in Nigeria Exchange Group; Intangible assets have positive but insignificantly effect on the performance of quoted manufacturing companies in Nigeria Exchange Group; current assets has positive significant effect on the performance of manufacturing companies quoted in the Nigeria Exchange Group. Consequent on the findings of the study, it is recommended amongst others that management of manufacturing companies in the Nigeria should formulate policy that will enhance their investment in property plant and equipment as this will increase the performance of their companies and enable them achieve shareholders wealth maximization objective. The study also recommended that management of manufacturing companies in their effort to enhance the performance of manufacturing companies should increase the level of the of on intangible assets. Increasing the investment in intangible assets would positively enha

Dual-career marriages: the interplay among dual-career lifestyle, satisfaction, relationship investments and commitment

ABSTRACT This study examined the potential mediating roles of relationship satisfaction and dual-career lifestyle satisfaction in the association between investments and commitment to a relationship. The participants comprise 213 Turkish dual-career married couples (N = 426) between the ages of 19–60, who have been married for at least seven months. Two models were proposed, and the Actor-Partner Interdependence Mediation Model (APIMeM) was conducted to test these models. The results revealed that the associations of both past and planned intangible investments to commitment were partially mediated through relationship satisfaction for both wives and husbands. This study provided support for the dyadic nature of the association between intangible investments and commitment via relationship satisfaction in Turkish dual-career married couples and discussed the findings in relation to the relevant literature.

Evaluation as Devaluation: The Labour of Critique in Fashion Education

A “critique” means something quite different in the art and design classroom than it does in the seminar room: an event of assessing students’ artwork. The monopolization of critique as a labour of appraisal serves to enforce that the hours fashion students spend crafting wearable garments are not remunerable labour hours but intangible investments in their own professional and personal development, installing a quite literal distinction between the material work created by the student and the immaterial work of the tutor to assign, guide, and grade it. This pedagogy helps naturalize the asymmetrical distribution of time and obligation through which the arts university precaritizes faculty in short-term work contracts while imprisoning students in long-term loans. By licensing its monopoly on critique to instructors within the studio-classroom so they may evaluate and thereby devaluate the work of students, the university insulates itself from solidarity between its different constituencies.

All losses are not alike: Real versus accounting-driven reported losses

AbstractWe examine the value relevance of accounting-driven losses that result from the immediate expensing of firms’ internally generated intangible investments versus losses occurring irrespective of intangible investments. Contrary to the long-held view that losses are less relevant than profits for valuation, we find that once the accounting bias of intangibles-expensing is undone, earnings of firms reporting intangibles-driven losses are as informative as earnings of profitable firms. Furthermore, contrary to the view that persistent losses decrease earnings relevance, our evidence shows no decrease in the relevance of earnings for firms reporting persistent intangibles-driven losses. We also find that firms reporting intangibles-driven losses subsequently outperform other loss firms and even profitable firms in value creation from investments in technological innovation and human capital. Our evidence further shows that firms reporting intangibles-driven losses have stronger future performance than other firms. Taken together, the results of this study demonstrate the fundamental differences between losses driven by the immediate expensing of internally generated intangible investments and losses reflecting genuine business performance shortfalls. Standard accounting performance measures, however, do not properly reflect these operational differences and their implications.

A machine learning approach to construct quarterly data on intangible investment for Eurozone

We develop a novel approach to construct quarterly time series data for annually measured intangible investment variables. We accomplish this by using machine learning methods to explore the relationship between these variables and key macroeconomic time series available on a quarterly frequency. The proposed approach offers some advantages over other econometric techniques. Specifically, it does not require any ex-ante assumptions for the link between the quarterly time series and their annual counterpart, while minimizing the need for computationally expensive algorithms and necessitating almost no data pre-processing. To demonstrate the usefulness of the constructed data, we present some business cycles facts for the intangible economies of Eurozone and estimate a dynamic factor model.

Capital Intangível e Produtividade das Empresas Portuguesas na Última Década (2010-2019)

This article analyzes the effects of intangible capital on the productivity of Portuguese firms in the last decade. Intangible assets can increase the productivity of labor and productive factors. Although no consensus has been reached on standard principles and uniform methods for measuring intangible assets, the attempts of various investigators, such as those proposed in this research, pave the way for the development of a framework. To achieve this objective, a Cobb-Douglas production function was estimated at the firm level, where intangible capital is assumed as a productive factor. To perform a sectoral analysis, the model was estimated by activity sector. We also estimated the evolution of the contribution of intangible capital in two distinct periods 2010-14 (recession) and 2015-19 (recovery). The results obtained were to some extent expected, confirming the evidence of the positive effect of intangible assets on productivity. The intangible effect is greater in the sectors of Manufacturing and Construction, and inside the Manufacturing sector, the Textile industry is where the effect is larger. For the Trade and Business Services sector the effect is negative or null. Although intangible capital has a strong influence at the aggregate level, it has gradually lost its relevance. This result is understandable, given the low and decreasing levels of intangible investment and the continuous decrease in intangible capital during the decade.

Is Ireland the most intangible intensive economy in Europe? A growth accounting perspective

Assessing the contribution of intangible investment to growth is a challenging and complex task for any country. However, it has become increasingly difficult to determine both the exact magnitude of economic performance and its composition in the case of the Irish economy. This is mainly due to the impact of certain distortionary transactions by a select number of multinationals operating in the Irish jurisdiction. In this paper, we address this issue by assessing, in a detailed manner, the contribution of intangible and tangible assets to the Irish growth story. We control for distortions in the official investment data series while also incorporating intangible assets that are not currently included in the National Accounts. Our results show that the observed unprecedented increase in the official intangible investment has a relatively minor contribution to the actual Irish labor productivity growth. Once the distortions are filtered out, Irish labor productivity growth is driven by tangible capital. More interestingly, non‐national accounts intangible capital has a sizeable pro‐cyclical impact on labor productivity growth.

Nematerijalna imovina i rast izvoza hrvatskih izvoznih poduzeća

This study tests the existence and direction of the relationship between investment in intangible assets and export and internationalization growth using the VAR, IRF, and VECM approaches. To gain a deeper understanding of this relationship, the following research question was posed: How does investment in intangible assets affect Croatian exporters’ export and internationalization growth? How long does this effect last? Based on the microfinance data of the largest Croatian exporters, the results suggest a relationship between exports and investments in intangible assets in previous periods. Accumulated impulse responses suggest that investment in intangible assets reduces and increases export growth. This U-shaped relationship between intangible asset investment and export growth does not converge to equilibrium within the ten years studied. The VECM shows that increased intangible assets lead to increased exports in the long run. However, the speed of adjustment to long-run equilibrium is slow, only 6.42% annually. The study is significant in two ways. First, it points out the relationship between investment in intangible assets and long-term export growth. Second, it provides information for policy implementation on the choice of strategic direction companies need to take to reposition themselves, preferably in forward-looking value chains, while opening discussion of the institutional infrastructure needed for this repositioning.

Does oil price uncertainty matter in firm innovation? Evidence from China

Inspired by the prevalence of firm innovation and substantial influence of international oil price uncertainty (OPU) on firm operation and decision-making, we investigate the influence of OPU on firm innovation. Using a sample of Chinese listed firms over the 2007–2019 period, our study reveals that OPU decreases firm innovation. This finding is consistent with the real options theory and the prospect theory. Mediation analysis shows that OPU could decrease firm innovation by increasing firms' financing constraints degree. Moreover, high-tech firms and those in highly competitive industries have fewer options to delay their innovation investments, we find that the adverse effects of OPU on their innovation are weaker. Finally, further analysis shows that government subsidies can help mitigate adverse effects of OPU on firm innovation. This paper reveals that OPU goes beyond the commonly known and understood regular indicator that shapes a firm's innovation activity and enriches firm-level evidence for the effects of OPU by highlighting the effects on long-term investment in intangible assets.

Tangible and intangible investments and sales growth of US firms

This article presents new insights into the evolving relation among different types of investments and the growth in sales of US nonfinancial listed firms during the 1979–2018 period. By means of quantile regressions, it is observed an increasing relevance over time of intangible investments vis-à-vis a stable or declining contribution of capital expenditure for all types of firms. However, the impact of different types of intangible investment differs depending on the kind of firm. Whereas advertising has a growing relevance on all types of firms except the top decile in growth distribution, the positive effects of research and development become increasingly concentrated in high-growth firms.

Effect of Intangible Investment on Non-Financial Performance of the Food and Beverage Sector in Indonesia During the Covid-19 Pandemic

This study is created to know if intangible investment affect non-financial performance in food and beverage industry in Indonesia during Covid-19 pandemic from 2017 to 2021. The data used in this study were obtained from financial statements of manufacturing companies that move in food and beverage industry and consistently the annual report listed in Indonesia Stock Exchange from 2017 to 2021. This study used purposive sampling which is why the sample used in this study amounted to 100 samples. This study also use multiple linear regression models to test the hypothesis. The result of this study had proven that market capitalization and leverage have an influence on non-financial performance. While the other independent variables do not have an influence on non-financial performance.

Beyond corporate financialization: From global value chains to the conundrum of intangible investments

The article presents a constructive critique of the ‘financialization of the firm’ hypothesis. Without calling into question the idea that financialization has been a major structural change over the last four decades, it argues that the financialization of the firm argument has been pushed too far, especially regarding its ‘crowding-out’ and ‘drain’ effects on investment. Instead, the capacity of finance to accelerate the process of ‘creative destruction’ through the reallocation of capital has not been sufficiently taken into consideration. Consequently, the corporate financialization approaches tend to underestimate other structural changes in business organization, like the associated rise of Global Value Chains (GVCs) and intangible investments, both conceptualized by the ‘smiling curve’ notion. These secular changes challenge the categories of investment and capital we inherited from industrial capitalism. It remains, however, that we do not know how to measure intangible investment.

Intangible assets: recognition criteria, classification and Evaluation

The article is devoted to the disclosure of the concept of «intangible assets» as accounting objects. The criteria for recognition of intangible assets in accounting are determined, their classification by types and groups is given. The composition of the actual costs of capital investments in intangible assets is disclosed. The evaluation methods are considered for various moments and in accordance with the purpose of the application.

IMPACT OF DIGITALISATION AND INVESTMENTS IN INTANGIBLE CAPITAL ON THE NON-FINANCIAL PERFORMANCE OF FIRMS IN SLOVENIA

Article examines the impact of digitalisation and intangible capital investment on the non-financial performance of firms in Slovenia. Article examines the relationship between: (1) digitalisation and firms’ nonfinancial performance; (2) digitalisation and firms’ attitude to digitalisation; (3) investments in intangible capital and firms’ non-financial performance; where we (4) also expect differences by industry and between firms operating in global value chains. Considering survey data, the SEM approach shows that, digitalisation and intangible investment both have positive effects on non-financial performance. Level of digitalisation depends on the importance attributed to digitalisation, whereas the importance of digitalisation depends on the expected long-term benefits of digitalisation for the firm. Level of digitalisation is dependent on the anticipated long-term benefits of digitalisation. These have a positive, yet non-significant impact on a firm’s level of digitalisation. Despite business agility having an impact on the importance of digitalisation for businesses that is less than the expected benefits, it is still highly significant. Other results were not statistically significant. Keywords: intangible capital, digitalisation, firm performance

Accounting for the slowdown in UK innovation and productivity

AbstractThis paper conducts a comprehensive sources‐of‐growth analysis for the UK market sector, 2000–19, using the latest ONS data, including new estimates of intangible investment, double deflated value‐added, and updated price indices, all constructed bottom‐up from data for 40 industries. The decomposition incorporates contributions from intangible assets, both capitalized and uncapitalized, in national accounts. Our main findings are that first, slowdowns in labour productivity are largest in more intangible‐, knowledge‐, technology‐ and digital‐intensive industries, using numerous definitions. Second, the labour productivity slowdown can be accounted for largely by a slowdown in ‘innovation’, where innovation is shorthand for contributions of intangible capital deepening and TFP growth. We show that: (a) the level of labour productivity in 2019 was 27 log points (31 percentage points) less than had it continued to grow at its 2000–7 rate; (b) reallocation of labour did not contribute to the slowdown; (c) capitalization of the full range of intangibles accounts for 5% of the slowdown; (d) 35% is accounted for by a slowdown in capital deepening (25% tangible, 10% intangible), and 78% by a slowdown in TFP growth; and (e) less than one‐tenth of the TFP slowdown can be accounted for by exceptionally fast growth pre‐crisis.

Coordination of cybersecurity risk management in the U.K. insurance sector

The increasing threat of cyberattacks has resulted in increased efforts by both the U.K. government and regulatory authorities to coordinate efforts to influence cybersecurity risk management practices in the U.K. insurance sector, focusing on cyber risk underwriters. This paper provides an evaluation of these arrangements. It first provides a descriptive overview of the key U.K. regulatory authorities and the evolution of their efforts over the past decade, as well as the scope for broader collaborations with industry and member-based associations and international organisations. It then evaluates the effectiveness of these efforts by providing a multi-method study of the incidence, nature and evolution of cost of data breaches, investment in computer systems and software intangible assets at risk of cyberattack, and a content analysis of annual reports of both U.K. regulators and a sample of U.K. insurers. The findings suggest that while both the total costs of data breaches and the size of investment in computer systems and software intangibles at risk of cyberattack have gradually increased over time, the degree of engagement with cyber as a reporting issue by both cyber insurers and financial regulators has not. It is concluded that while these efforts have been apparently successful in avoiding a large-scale, systemic cyberattack on the U.K. insurance industry, there are significant gaps and overlaps in the system of cyber regulatory oversight.

Information asymmetry, attitudes toward risk, and macroeconomic performance

Every firm in differentiated oligopoly offers a product that is different from that of rival firms. Similarly, in general, a firm interfaces with consumers and interacts with rival firms on the market. As a result, both the firm and consumers experience information asymmetry. In practice, a firm is a risk taker in its dealings with rival firms and is a risk averter in its interface with consumers. However, firms utilize intangible investments (non-price strategies) to convey the value of their product to consumers and stabilize their market share. Note that consumers are risk averse and ignore such attempts by a firm once they recognize the intrinsic value of the product. These two features explain the frequency and depth of the supply fluctuations that have not been acknowledged so far. This study offers a fundamental explanation of this phenomenon along with the steady state behavior in a synthetic manner.“With uncertainty entirely absent, every individual being in possession of perfect knowledge of the situation, there would be no occasion for anything of the nature of responsible management or control of production activity.”- Knight (1957, p.267)

Intangible investments and cost of equity capital: An empirical research on Vietnamese firms

Intangible investments and cost of equity capital: An empirical research on Vietnamese firms

Productivity drivers of infrastructure companies: Network industries utilizing economies of scale in the digital era

AbstractWhat drives the productivity dynamics of infrastructure companies? Using a panel of firms in 14 countries, we study total factor productivity (TFP) enhancers of utility and network services companies. We find that moving TFP closer to the technological frontier drives productivity growth at higher speeds in Asian countries than in European countries. We also find that financial leverage exerts a positive effect on TFP growth for larger infrastructure firms and that more financially developed countries utilize economies of scale through better use of financial resources. Large utility and transportation companies display a higher rate of TFP growth, indicating that a competition policy to encourage M&As would be prudent for the utility/transportation sectors to maximize economies of scale. In contrast, we find diseconomies of scale for energy companies in some countries. Moreover, young network firms improve TFP growth faster than their peers in countries with fewer product market regulations. Therefore, policies should remove entry barriers while facilitating the departure of old and low‐productivity firms from network markets. Finally, policymakers should offer well‐targeted fiscal incentives for intangible investments to boost TFP because the accumulation of intangible assets such as digital technology promotes more scale economies through network effects.

Supplying lead firms, intangible assets and power in global value chains: Explaining governance in the fertilizer chain

AbstractGlobal suppliers of agricultural inputs such as seeds, fertilizers and agrochemicals exert increasing degrees of power in global value chains (GVCs). Although the GVC literature has explained how global buyers govern GVCs from the buying‐end, the question of how global suppliers achieve governance from the supplying‐end remains underexplored. We address this gap by combining a multidimensional typology of power with literature on intangible assets. We argue that intangible assets are crucial resources for global suppliers to morph otherwise ungovernable supply chains for undifferentiated input commodities into more sophisticated and governable GVCs. We illustrate our argument with the case of the global fertilizer supplier, YARA International. YARA's intangible asset investments were instrumental in governing the value chain integration of Tanzanian smallholder farmers. They allowed YARA to exert more than bargaining power (demonstrative, institutional and constitutive power) and to effectively position itself as supplying lead firm in Tanzania's agro‐industrial GVC.