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Endogenous value creation: managerial decisions on intangibles

Elena Shakina (Economics Department, National Research University Higher School of Economics, Perm, Russia)
Mariia Molodchik (Economics Department, National Research University Higher School of Economics, Perm, Russia)
Angel Barajas (Accountancy and Finance, University of Vigo, Ourense, Spain, and Department of Economics and Finance, National Research University Higher School of Economics, Perm, Russia)

Management Research Review

ISSN: 2040-8269

Article publication date: 18 April 2017




This study aims to explore value creation through intangibles in corporations, taking into consideration the endogenous nature of managerial decisions. It is stated that intangibles bring extra information asymmetry into a company and make managers and investors’ goals less aligned.


A theoretical model is elaborated and empirically tested on the assumption that managers, while investing in intangibles, simultaneously make a company competitive and attractive to investors. The authors use a conceptual model of endogenous value creation to test how intangibles affect outperforming of a company and provoke the expectations of investors. The research is carried out on a sample of more than 1,650 European companies covering the period from 2004 to 2011. Structural equation modelling is applied for the purposes of empirical analysis.


The authors reveal a diverse impact of intangibles on outperforming of a company measured by economic value added and its ability to create market value. The study discovers that managers are prone to indicate positive signals to investors rather than create sustainable competitive advantages.

Practical implications

This research emphasizes on the particular importance of awareness of policymakers, namely, companies’ top managers, about the outcomes of their decisions. Decision-making in public companies should involve as much deliberation as possible about the potential impact of what is decided.


This work contributes primarily to the field of corporate finance in companies that use intangibles. The endogenous process of value creation is modelled and tested. As a result, a number of essential problems in agent relationships in intangible-intensive corporations are discovered.



The authors thank the researchers and assistants of the ID Lab (NRU Higher School of Economics – Perm Campus) for their work creating the database and their support.

This study comprises research findings carried out within the framework of the project (Number 15-18-20039) supported by the Russian Scientific Fund.


Shakina, E., Molodchik, M. and Barajas, A. (2017), "Endogenous value creation: managerial decisions on intangibles", Management Research Review, Vol. 40 No. 4, pp. 410-428.



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