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Status-quo vs new strategy in intangibles

Elena Shakina (National Research University Higher School of Economics, Perm, Russian Federation)
Angel Barajas (Financial Economics and Accounting, University of Vigo, Ourense, Spain) (National Research University Higher School of Economics, Perm, Russian Federation)
Petr Parshakov (International Laboratory of Intangible-driven Economy, National Research University Higher School of Economics, Perm, Russian Federation)
Aleksei Chadov (Department of Economics and Finance, National Research University Higher School of Economics, Perm, Russian Federation)

Journal of Economic Studies

ISSN: 0144-3585

Article publication date: 9 January 2017

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Abstract

Purpose

This study explores company strategies for intangibles. The authors investigate whether it is reasonable for companies to intensify intangibles when the current strategy is not intangible-intensive. The purpose of this paper is to elaborate a theoretical model to describe the strategic decision making in companies.

Design/methodology/approach

The authors use the Bellman-equation framework to find the conditions under which a change in strategy for intangibles is reasonable.

Findings

The results determine the parameters of returns on intangibles in different strategies, the optimal intangible stock and the influence of external economic shocks. The findings of the study demonstrate that many requirements have to be met to make intangible-intensive strategy beneficial for a company. Moreover negative shocks of crises force a company to postpone a new strategy on intangibles.

Practical implications

This research provides an insight into strategic behavior of companies under uncertainty. The theoretical findings demonstrate under which conditions companies should decide to switch to a strategy more intangible-intensive. This model can be used to empirically test parameters of different investment strategies of companies using structural estimation techniques.

Originality/value

This work contributes to the theory of managerial economics giving closed form solutions for the dynamic optimization of company behavior. The findings also show how this behavior might change when economic crises are faced or expected.

Keywords

Acknowledgements

The research leading to these results has received funding from the Basic Research Program at the National Research University Higher School of Economics.

Citation

Shakina, E., Barajas, A., Parshakov, P. and Chadov, A. (2017), "Status-quo vs new strategy in intangibles", Journal of Economic Studies, Vol. 44 No. 1, pp. 138-153. https://doi.org/10.1108/JES-07-2015-0132

Publisher

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Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited