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Article
Publication date: 17 April 2009

Klaus Moeller

The purpose of this paper is to analyse the effect between intangible and tangible (i.e. financial) organizational performance as well as the effects of the crucial influencing…

4462

Abstract

Purpose

The purpose of this paper is to analyse the effect between intangible and tangible (i.e. financial) organizational performance as well as the effects of the crucial influencing factors “trust”, “strategic relevance” and “participation”.

Design/methodology/approach

Structural equation modelling is used to test a large‐scale empirical study of more than 100 German business networks. Quantitative data are collected from the heads of the management accounting departments by means of a written questionnaire.

Findings

The results show an interrelation between intangible and tangible/financial performance that is mainly influenced by strategic relevance and participation. In contrast to other studies, trust is not found to have significant effects on tangible or intangible performance.

Research limitations/implications

As the study focuses on German business networks, country‐specific effects cannot be excluded. Furthermore, no time‐lagging effects have been revealed, as the data are only representative of a point in time. As the study is based on empirical data gathered by individual persons, it is open to general criticism of the broad empirical analysis methodology that is applied.

Practical implications

The study supports the selection of measures for performance management and the control of intangibles. It differs from prior studies in respect of its findings regarding the impact of trust on intangible and tangible performance; consequently, more research on this topic is essential.

Originality/value

This is one of the first studies that focuses on the prerequisites of intangible performance instead of investigating the correlation between different groups of intangible factors. Measures from social capital theory, as well as from organisational system design and strategic management, are integrated into this study.

Details

Journal of Intellectual Capital, vol. 10 no. 2
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 25 October 2011

Saoussen Boujelben and Hassouna Fedhila

The main purpose of this study is to investigate the relationship between intangible investments (R&D, advertising, training, software acquisitions and quality) and the ability of…

1890

Abstract

Purpose

The main purpose of this study is to investigate the relationship between intangible investments (R&D, advertising, training, software acquisitions and quality) and the ability of firms to generate future OCF (hereafter cash‐flow from operations).

Design/methodology/approach

The authors developed dynamic panel models to estimate the relationship between intangible investments and three subsequent periods cash flows. These models are estimated using generalized method of moments (GMM), on a panel of 300 observations related to 50 Tunisian manufacturing firms and six years of data (2001‐2006).

Findings

The findings show a positive and significant effect of intangible investments on future operating cash flows. First, this result confirms the main hypothesis of resource based view (RBV). Second, it is found that investments in R&D, quality, and advertising have significant effects on future cash flows from operations. While the effect of R&D activities and quality persists until the third lagged period, the effect of advertising expenditures is rapid and temporary.

Practical implications

The investigation provides an empirical validation on the role of intangible investment in generating and sustaining competitive advantage. The significant effect of R&D and quality expenses indicates the role of these activities in adding value to the firm product, and hence in the creation of competitive advantage which allows the firm to manage the components of its operating cycle, especially cash received from customers, resulting in superior future cash flows from operations.

Originality/value

First, the use of cash‐flow basis, as an alternative approach to accrual basis, for intangibles valuation avoids the shortcomings of accrual‐based performance measures in forecasting future operating cash flows because of earnings management practices. Second, the majority of the research dealing with the valuation of intangibles has been conducted in the context of developed countries, therefore in terms of the relevance of intangible investments significantly less is known about emerging economies. The choice of Tunisia, in this regard, is a particularly important contribution to the research on emerging economies.

Article
Publication date: 5 October 2018

Vladimir Dženopoljac, Shahnawaz Muhammed and Stevo Janošević

The purpose of this paper is to assess the extent to which financial and market performance of companies in the oil and gas sector can be attributed to the value of their…

Abstract

Purpose

The purpose of this paper is to assess the extent to which financial and market performance of companies in the oil and gas sector can be attributed to the value of their intangibles.

Design/methodology/approach

The research utilized publicly available data on global oil and gas companies from 2000 to 2015. Panel data analysis was used to assess the relationship between intangibles (measured by Calculated Intangible Value (CIV)) and financial and market performance of these companies.

Findings

Results show that intangibles had a significant impact on firm performance in multiple financial measures. Firms’ intangibles also influence their market capitalization, indicating that the financial markets discount such information in their pricing.

Research limitations/implications

Although the impact of intangibles on corporate performance is found to be significant, the size of that impact is small, suggesting that significant increase in the size of intangibles would only lead to a modest increase in corporate performance. Additionally, the research sample was limited to the top oil and gas firms listed in the Fortune 2000 global list and limits the generalization of the findings. Despite these limitations, the research provides greater confidence in using CIV to assess intangibles in organizations.

Practical implications

This research highlights the importance and ways of measurement of intangibles for managers in oil and gas companies and its significance for their firms’ performance.

Originality/value

The paper fills the gap in the literature in the assessment of intangibles in the oil and gas sector, as well as in the assessment of using CIV to measure the impact of intangibles on company performance.

Details

Management Decision, vol. 57 no. 5
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 12 January 2015

Pirjo Ståhle, Sten Ståhle and Carol Y.Y. Lin

The purpose of this paper is to examine to what extent national intangible capital (NIC) explains GDP growth and to assess its impact on GDP formation in different countries. The…

Abstract

Purpose

The purpose of this paper is to examine to what extent national intangible capital (NIC) explains GDP growth and to assess its impact on GDP formation in different countries. The paper brings a new perspective to explaining hidden economic drivers.

Design/methodology/approach

The paper introduces a new theoretically and computationally justified method, so-called ELSS model that is based on expansion and augmentation of the Cobb-Douglas production function with a wide range of NIC indicators. The method is applied by using the database that contains NIC indices for 48 countries covering the period from 2001 to 2011.

Findings

The results show that intangible capital accounts for 45 per cent of world GDP. The figure for the USA is 70.3 per cent and for the European Union 51.6 per cent. The Nordic countries stand out with a higher figure at 64.7 per cent, with NIC contributing to 72.5 per cent of GDP in Sweden, 69.7 per cent in Finland and 67.6 per cent in Denmark.

Research limitations/implications

The expanded Cobb-Douglas production function is sensitive to valuations of capital inputs and sensitive to estimates of production shares for various augmenting and expanding inputs. Therefore further work is needed to develop and test methodologies for the assessment of all of these.

Practical implications

ELSS production function helps to give a realistic picture of the value and impact of NIC and accordingly gives evidence for accurate investment decisions for the future.

Social implications

The method will help policy makers figure out what steps are needed to reduce the cross-country NIC differences.

Originality/value

The authors have uncovered the value of NIC beyond monetary inputs, and at the same time taken account of country specifics. The ELSS formula is comprehensive yet not too complicated to replicate. The approach significantly contributes to the development of the current research tradition into intangibles.

Details

Journal of Intellectual Capital, vol. 16 no. 1
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 19 November 2019

Ilídio Tomás Lopes

The purpose of this paper is to identify the impact of intangibles as drivers of economic future benefits, in the top technological companies in the world. It also aims to…

Abstract

Purpose

The purpose of this paper is to identify the impact of intangibles as drivers of economic future benefits, in the top technological companies in the world. It also aims to identify whether the distribution of those intellectual capital (IC) drivers depends on the region and on the accounting standards, used in the preparation of firms’ financial reporting.

Design/methodology/approach

Using information from the major technological firms for a range of time of five years, a set of IC proxies were identified and regressed. Three linear models were used, and hypotheses were performed toward the identification of significant impacts on firms’ turnover prediction.

Findings

A set of intangibles was identified as significant drivers of firms’ turnover. Results suggest that the distribution of those proxies differ among regions and depend on the accounting standards. Firms from North-American evidence higher levels of intangibles, their boards composition is differentiated, additionally tending to increasingly invest in research and development activities.

Research limitations/implications

In spite of the limitations, the authors underline the sample size. However, the current approach can be replicated over time, and based in other rankings, applicable to other activity sectors and using different metrics.

Practical implications

Based on the major technological firms worldwide, the research adds value to the already known scope of intangibles, by providing additional and complimentary outcomes. A new direction, based on the scope of intangibles accounting standards used in the preparation of financial statements, was flagged toward theory and practice alignment.

Originality/value

This research adds value to the current literature by exploring the effects of intangibles in the major technological companies in the world. Focused in a sector strongly marked by innovative strategies, it provides a new and complimentary overview.

Details

Measuring Business Excellence, vol. 23 no. 4
Type: Research Article
ISSN: 1368-3047

Keywords

Article
Publication date: 27 May 2014

Domenico Dentoni, Glynn T. Tonsor, Roger Calantone and H. Christopher Peterson

The purpose of this paper is to disentangle the direct and indirect effects of three credence labels (Australian, animal welfare and grass-fed) on US consumer attitudes toward…

Abstract

Purpose

The purpose of this paper is to disentangle the direct and indirect effects of three credence labels (Australian, animal welfare and grass-fed) on US consumer attitudes toward buying beef steaks. Furthermore, it explores the impact of consumer attribute knowledge, usage frequency, education and opinion strength on the magnitude of direct and indirect effects.

Design/methodology/approach

Data are collected through an online experiment with 460 US consumers and analyzed with path modeling.

Findings

The Australian label generates a 86 percent negative direct effect vs a 14 percent negative indirect effect on consumer attitudes, which means that US consumers do not make strong inferences to form their attitudes toward buying Australian beef. The animal welfare label generates 50 percent direct and 50 percent indirect effects. The grass-fed label generates only indirect effects (100 percent). The higher consumer education, attribute knowledge, usage frequency, education and opinion strength, the weaker are the indirect effects of credence labels.

Research limitations/implications

The study focusses on consumers in one country (USA), one product (beef steak) and one label across three attributes, therefore generalization of results is limited.

Practical implications

The study offers a tool to agribusiness managers as well as to policy makers, NGOs and consumer groups to design and assess the effectiveness of communication campaigns attempting to strengthen (or weaken) consumer inferences and attitudes relative to credence labels.

Originality/value

Despite the wide literature on consumer inferences based on credence labels, this is the first study that quantitatively disentangles the complex set of inferential effects generated by credence labels and explores common relationships across multiple credence attributes.

Details

British Food Journal, vol. 116 no. 6
Type: Research Article
ISSN: 0007-070X

Keywords

Article
Publication date: 25 February 2020

Sagarika Mishra and Mike T. Ewing

The purpose of this study to examine the effect of financial constraint on intangible investment because intangible investment provides an overall picture of marketing investment…

Abstract

Purpose

The purpose of this study to examine the effect of financial constraint on intangible investment because intangible investment provides an overall picture of marketing investment and activity. Intangible investment also plays a significant role in facilitating future sales. Using a new measure of intangible investment (Peters and Taylor, 2017), the authors first establish that intangible investment is positively related with future sales. Then, using a new text-based measure of financial constraint, the authors show that financial constraint has a significant negative effect on future intangible investments after controlling for other factors. Intangible investment has three components. The first is R&D, the second is 30 per cent of selling and general administrative expense (SGA) and the third is other intangibles. The authors find that the negative and significant effect of financial constraint on 30 per cent SGA is stronger. This indicates that financially constrained firms reduce marketing related investments. The authors then considered firm size and found that smaller firms facing financial constraint continue to increase their intangible investments, whereas larger firms reduce their intangible investment. As a robustness test, the authors use advertising expenditure as a measure of promotion related investment and find that financial constraint has a negative effect on advertising spending. The authors then use two traditional measures of financial constraint in their analysis to compare with the new text-based measure.

Design/methodology/approach

The authors use ordinary least squares with cluster robust standard error to conduct their empirical analysis.

Findings

First the authors establish that intangible investment positively affects future sales. Further the authors find that financial constraint negatively affects intangible investment. Moreover, financial constraint negatively affects the brand capital of intangible investment.

Research limitations/implications

The authors did not conduct any industry specific analysis to see how financial constraints affect intangible investment across different industries. Industry specific analysis is important because in some industries/sectors intangibles are clearly more important than in others, so this is an important avenue for future research. It will also be interesting to explore if and how financial constraint has a mediating effect on sales growth via intangible investment and different components of intangibles.

Practical implications

This study identifies another important factor that can negatively affect brand capital investment.

Originality/value

The authors have used a measure of financial constraint and text mined all the annual reports of US firms for the period of 1994-2016 to compute this measure.

Details

European Journal of Marketing, vol. 54 no. 3
Type: Research Article
ISSN: 0309-0566

Keywords

Article
Publication date: 12 February 2018

Abdifatah Ahmed Haji and Nazli Anum Mohd Ghazali

The purpose of this paper is primarily to explore the extent of intangible assets and liabilities of large Malaysian companies. The authors also examine whether intangible assets…

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Abstract

Purpose

The purpose of this paper is primarily to explore the extent of intangible assets and liabilities of large Malaysian companies. The authors also examine whether intangible assets and liabilities of a firm have similar or contrasting roles in firm performance.

Design/methodology/approach

Using a direct and straightforward measure of intangible assets and liabilities, the authors examine a large pool of data from large Malaysian companies over a six-year period spanning from 2008 to 2013.

Findings

The longitudinal analyses show a significant number of the sample companies, between 34 and 59.33 percent, have a consistent pattern of intangible liabilities. The authors also find firms with intangible liabilities have significantly underperformed financially than a control group of firms. In addition, the authors find that intangible liabilities have significant negative impact on firm performance whereas intangible assets have a contrasting positive impact on firm performance.

Research limitations/implications

One limitation of this study is that the authors have only used a single measure of intangible assets and liabilities. Albeit the measures used are straightforward and more objective, there could be other measures to capture intangibles.

Practical implications

The research findings have several theoretical as well as policy implications. Theoretically, the authors extend the resource-based view to the intangible asset-liability mix, affirming the crucial role of intangible resources in financial performance whilst introducing the unfavorable role of intangible liabilities in corporate financial performance. In terms of policy implications, the research findings provide initial empirical input to emerging calls for broader perspectives of intangibles, beyond intangible assets to include intangible liabilities, and therefore belong to an emerging paradigm toward the nature of intangibles.

Originality/value

This study documents a rare empirical account of the contrasting roles of intangible assets and liabilities in corporate financial performance.

Details

Journal of Applied Accounting Research, vol. 19 no. 1
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 6 June 2016

Gabriel Bachner, Sebastian Seebauer, Clemens Pfurtscheller and Anja Brucker

The purpose of this paper is to reveal the benefits of organized voluntary emergency services (OVES) in the case of flood events, since such information is mostly not available…

Abstract

Purpose

The purpose of this paper is to reveal the benefits of organized voluntary emergency services (OVES) in the case of flood events, since such information is mostly not available, but needed to analyze the total effects of disasters and respective responses. Moreover, the efficient allocation of scarce public resources for emergency and risk management should be based on empirical data.

Design/methodology/approach

Based on a qualitative framework describing the benefits of OVES, the authors develop different tools for monetizing tangible as well as intangible benefits and apply them for case studies in Austria.

Findings

The benefits of volunteer efforts for emergency management cannot be monetized easily, since they are often of intangible character. Nevertheless, we show that the benefits of OVES could be substantial.

Research limitations/implications

As the authors analyze case studies, the results cannot be directly transferred to other regions, but illustrate the empirical dimension of the benefits of OVES. Further research should be undertaken to assess the benefits of avoided losses by OVES using single-object data.

Practical implications

Since many emergency service institutions are involved during/after natural hazards, data availability and exchange should be improved. Objective decisions for investment in emergency services should be based on data of recent hazard events and case studies.

Originality/value

The paper develops a toolbox to evaluate the benefits of OVES and is thus highly valuable for emergency managers, which are responsible for deploying volunteers and non-volunteers in emergency management.

Details

Disaster Prevention and Management, vol. 25 no. 3
Type: Research Article
ISSN: 0965-3562

Keywords

Article
Publication date: 7 February 2022

Rohit Prabhudesai, Nitin Pangarkar and Ch.V.V.S.N.V. Prasad

The aim of the study was to determine how the different types of resources possessed by a small- and medium-sized enterprise (SME), in conjunction with the environmental…

Abstract

Purpose

The aim of the study was to determine how the different types of resources possessed by a small- and medium-sized enterprise (SME), in conjunction with the environmental uncertainty perceived by the SME's managers, affect SME's alliance formation.

Design/methodology/approach

Personal interview method was used to collect responses to a survey instrument from Indian SMEs. Logistic regression technique was used to analyze the responses obtained from 127 manufacturing enterprises.

Findings

The study finds that while both tangible and intangible resources possessed by an enterprise positively influence the enterprise's alliance formation, the influence of intangible resources is significantly stronger. The authors also observed the interactive effect between each resource type and environmental uncertainty to be a significant predictor of alliance formation.

Research limitations/implications

The study does not account for temporal effects such as changes in resources and perceived environmental uncertainty, which may affect alliance formation. Similarly, because the data were obtained from a geographically restricted sample, replication of the study in other geographies may be necessary for generalizing the results.

Originality/value

The paper responds to the call for research to link firm resources and perceived environmental uncertainty toward explaining alliance formation by SMEs. The study went beyond making a distinction between the two types of resources by explicating how the interaction of resource type and environmental uncertainty will affect alliance formation.

Details

Journal of Small Business and Enterprise Development, vol. 29 no. 7
Type: Research Article
ISSN: 1462-6004

Keywords

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