Are intangibles really a source of future economic benefits? Evidence from the technology sector

Abstract

Purpose

The purpose of this paper is to identify the impact of intangibles as drivers of economic future benefits, in the top technological companies in the world. It also aims to identify whether the distribution of those intellectual capital (IC) drivers depends on the region and on the accounting standards, used in the preparation of firms’ financial reporting.

Design/methodology/approach

Using information from the major technological firms for a range of time of five years, a set of IC proxies were identified and regressed. Three linear models were used, and hypotheses were performed toward the identification of significant impacts on firms’ turnover prediction.

Findings

A set of intangibles was identified as significant drivers of firms’ turnover. Results suggest that the distribution of those proxies differ among regions and depend on the accounting standards. Firms from North-American evidence higher levels of intangibles, their boards composition is differentiated, additionally tending to increasingly invest in research and development activities.

Research limitations/implications

In spite of the limitations, the authors underline the sample size. However, the current approach can be replicated over time, and based in other rankings, applicable to other activity sectors and using different metrics.

Practical implications

Based on the major technological firms worldwide, the research adds value to the already known scope of intangibles, by providing additional and complimentary outcomes. A new direction, based on the scope of intangibles accounting standards used in the preparation of financial statements, was flagged toward theory and practice alignment.

Originality/value

This research adds value to the current literature by exploring the effects of intangibles in the major technological companies in the world. Focused in a sector strongly marked by innovative strategies, it provides a new and complimentary overview.

Citation

Lopes, I.T. (2019), "Are intangibles really a source of future economic benefits? Evidence from the technology sector", Measuring Business Excellence, Vol. 23 No. 4, pp. 442-457. https://doi.org/10.1108/MBE-08-2018-0057