A Simple Approach to Valuing Intangibles and Rents

Wan-Chien Chiu, Ravi Jagannathan, Yo-Lan Lin and Kevin Tseng

No 30829, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We decompose the gap between a firm’s market and book values into capitalized-intangible-assets and a residual, consisting of value of capacity-adjustment-costs, economic-rents and potential mispricing. Our estimated parameter-values for capitalizing expenditures creating intangible-assets are consistent with values reported in the literature, even though we use a different approach. Firms with higher residuals have higher profitability and markups, lower labor share, face fewer product market threats, exhibit less sensitivity of investment to traditional as well as intangibles-adjusted Tobin’s Q, and benefited more from globalization during this century. This is consistent with there being a significant ex post rents-component in the residual.

JEL-codes: G0 G00 G12 (search for similar items in EconPapers)
Date: 2023-01
New Economics Papers: this item is included in nep-ifn
Note: AP
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w30829.pdf (application/pdf)

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:nbr:nberwo:30829

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w30829

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().