Intangibles and the UK under-investment puzzle: Evidence from firm-level panel data

Dongna Zhang

Economics Letters, 2020, vol. 194, issue C

Abstract: This paper analyses the relationship between intangibles and the low business investment relative to Q at the firm-level. Using a large panel of UK firms, the findings suggest that a negative association exists between intangibles and fixed investment. The under-investment gap since 2002 can be largely reduced by controlling for intangibles. In particular, the impact is magnified for firms with higher leverage, lower tangibility and lower labour productivity.

Keywords: Investment; Tobin’s Q; Intangibles (search for similar items in EconPapers)
JEL-codes: D22 E22 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:194:y:2020:i:c:s0165176520302445

DOI: 10.1016/j.econlet.2020.109389

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