International Comparison of Intangible Assets’ Disclosure and Investment Behavior

Kunio Ito () and Tetsuyuki Kagaya
Additional contact information
Kunio Ito: Hitotsubashi University Graduate School of Commerce and Management
Tetsuyuki Kagaya: Hitotsubashi University Graduate School of Commerce and Management

Chapter Chapter 12 in Dynamics of Knowledge, Corporate Systems and Innovation, 2010, pp 293-313 from Springer

Abstract: Abstract The purpose of this chapter is to empirically examine how the differences of intangible assets’ disclosures affect research and development investments and their outputs in Japanese, North American and Western European companies over 1990s and 2000s by comparing the financial ratios in each region. At first, we examine the differences of the intangible asset’s disclosures in each region. The ratio of the intangibles to total assets in Japanese companies is lower than that in the others. The result suggests that the Japanese companies have less access to evaluating the intangible assets than the others have. Second, we examine the differences of R&D investment in each region. While the R&D expenditures to sales ratio in Japanese companies is lower than that in the others, the dispersion among Japanese companies is smaller than that among the others. Finally, we examine how the differences of the R&D investment affect its outputs by comparing the ROA of Japanese companies with of the North American and the Western European companies. We focus on the ROA because it reflects the power of intangible assets. There are fewer Japanese companies with high margin than the others and it means revert speed of ROA in Japanese companies is faster than that of the others. Accordingly, Japanese companies tend to underestimate the effects of the intangible assets’ investment because they have less access to visualizing the intangible assets. We concluded that the investment of the intangible assets in Japanese companies has been insufficient, and this results in few Japanese companies which have enjoyed the higher margin over a long period.

Keywords: Financial Performance; European Company; Japanese Company; Balance Sheet; Accounting Standard (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:sprchp:978-3-642-04480-9_12

Ordering information: This item can be ordered from
http://www.springer.com/9783642044809

DOI: 10.1007/978-3-642-04480-9_12

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().