The value relevance of intangibles: some evidence on industry sector, firm performance and size effects

Maqsood Iqbal Qureshi

International Journal of Accounting, Auditing and Performance Evaluation, 2017, vol. 13, issue 3, 293-307

Abstract: This study, using a valuation model and a sample of UK firms for the period between 1998 and 2003, empirically investigates whether the market attaches different values to investments in goodwill (GW), research and development (RD) and advertising (AD) by firms in different sectors, of different sizes, and with different performances. The research findings indicate that the market attaches different values to investments in GW, RD and AD by firms in different sectors (manufacturing and non-manufacturing), of different sizes (large and small firms) and with different performances (profit-making and loss-making firms). Our results provide evidence that both RD and AD are valued almost equally for manufacturing and non-manufacturing and profit making and loss-making firms. While the market assigns more value to non-manufacturing and profit making firms' goodwill. Our results also suggest that goodwill, R%D, and advertising are likely to be more effective for larger firms. Overall, these results should also interest analysts and creditors seeking to evaluate firms' intangible investments, professionals engaged in designing disclosure strategies, and academics exploring issues related to intangibles.

Keywords: advertising expenditures; goodwill; research and development intangibles; valuation; market value. (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.inderscience.com/link.php?id=85184 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijaape:v:13:y:2017:i:3:p:293-307

Access Statistics for this article

More articles in International Journal of Accounting, Auditing and Performance Evaluation from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().