Intangible-driven value creation: supporting and obstructing factors
Purpose: This study investigates the factors that support or obstruct market value creation through intangible capital.
Design/methodology/approach: We explore the impact of intangibles and exogenous shocks on corporate attractiveness for investors measured by Market Value Added (MVA). Specifically we analyse the relationship between intangible-driven outperformance of companies, measured by Economic Value Added (EVA) and a number of intangible drivers on macro-, meso- and micro- levels. We suppose that the process of value creation is not only confined to companies’ performances. Our empirical research was conducted on more than 900 public companies from Europe and US during the period 2005-2009.
Findings: Our study establishes that investment attractiveness is affected by intangibles. We found that a company’s experience, size and innovative focus facilitate value creation. An unexpected result was revealed concerning countries’ education level, which appears to be an obstructive condition for intangible-driven value creation.
Research limitations/implications: The study reveals the significance of industry belonging for intangible-driven value creation. Nevertheless, it does not discover the particular characteristics of industry that influence corporate attractiveness for investors. These issues could be addressed in future research.
Practical implications: Our findings extend the understanding of the phenomenon of intangible capital and enable the improvement of investment decision-making.
Originality/value: The study emphasizes the holistic framework of market value creation by analysing a number of strategic crucial factors in line with Economic Value Added.