Intangible assets, firm value, and performance: does intangible-intensive matter?

Panern Intara and Nittikorn Suwansin

Cogent Economics & Finance, 2024, vol. 12, issue 1, 2375341

Abstract: This study examines the effects of intangible assets and all components of intangible assets on Thai-listed companies’ firm value and performance. The aggregate value of intangible assets and three components of intangible assets, namely identifiable intangible assets (IIA), goodwill (GW), and research and development (R&D), were used as test variables. Firm value, measured by Tobin’s Q, and two measurements of firm performance, return on assets (ROA) and return on equity (ROE), were used as dependent variables. The final sample includes 3,701 observations for ten years from 2012 to 2021 in Thailand. Ordinary least square (OLS) was employed to test the hypotheses. Estimated results show that the aggregate value of intangible assets affects firm value positively. When the aggregate value of intangible assets was classified into three components, IIA positively impacted firm value. In contrast, GW and R&D positively impacted both firm value and performance. We further separated our observations into two groups based on the intangible-intensive profile (IIP). We confirmed that the positive impacts of IIA, GW, and R&D on firm value and performance were higher for IIP firms than for non-IIP firms.This study explores the impact of intangible assets on the value and performance of Thai listed companies. We focused on three main components: identifiable intangible assets (IIA), research and development (R&D), and goodwill (GW), along with the aggregate of intangible assets (IA). Results show that these assets positively affect firm value and performance, especially in firms with high intangible-intensive profiles (IIP). The findings highlight that internal processes and unique, inimitable resources drive a firm’s success. Intangible assets collectively contribute to value creation. For executives, prioritizing intangible assets can enhance performance and competitiveness. Investors should focus on intangible assets, particularly R&D, when evaluating stocks. This study contributes to the literature by clarifying the role of intangible assets in firm performance and value, particularly concerning intangible-intensive profiles.

Date: 2024
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DOI: 10.1080/23322039.2024.2375341

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