Intangible-driven value creation: supporting and obstructing factors

Abstract

Purpose

This study aims to investigate the factors that support or obstruct market value creation through intangible capital.

Design/methodology/approach

The paper explores the impact of intangibles and exogenous shocks on corporate attractiveness for investors measured by market value added. Specifically, 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 is analyzed. It is supposed that the process of value creation is not only confined to companies’ performances. The empirical research was conducted on > 900 public companies from Europe and the USA during the period of 2005-2009.

Findings

The study establishes that investment attractiveness is affected by intangibles. It is 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

The findings established in this study 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 analyzing a number of strategic crucial factors in line with EVA.

Citation

Shakina, E. and Molodchik, M. (2014), "Intangible-driven value creation: supporting and obstructing factors", Measuring Business Excellence, Vol. 18 No. 3, pp. 87-100. https://doi.org/10.1108/MBE-12-2013-0063