ABSTRACT
Purpose
The study aims to analyze the relationship between intangible assets and the economic performance of Brazilian public companies.
Design/methodology/approach
We calculated the Degree of Intangibility (DI) to segregate companies into two groups: intangible-intensive and tangible-intensive in a sample of Brazilian public companies from 2012 to 2016. We applied the Mann-Whitney test to verify whether there were statistically significant differences between these two groups of companies concerning the Operating Margin, Return on Equity, Return on Assets, Market Value Added and Earning per Share.
Findings
The results show that intangible-intensive companies presented higher economic performance in most part of the indicators and years analyzed. In addition, we did not find significant results for Earnings per Share, although the signed rank sum mean values of intangible-intensive are higher than tangible-intensive companies in most part of the years.
Practical implications -
The findings seek to contribute to discussions about the importance of intangible resources as determinants of competitive advantages and reflecting in higher economic performance, and thus increasing market value. In this sense, investments in intangible resources can be applied in adopting initiatives in markets and definition of strategic positions in companies. Finally, our study seeks also to contribute to capital markets since the relationship between intangible assets and economic performance can be useful in detecting investment opportunities.
Originality/value
Previous studies analyzed the relationship between intangible assets and economic performance with other periods and samples. We also measured different proxies for economic performance as Operating Margin, Return on Equity, Return on Assets, Market Value Added and Earnings per Share.
Keywords:
intangible assets; performance; Resource-Based View; competitive advantage
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SII is the group of companies intensive in intangible assets. STI is the group of companies intensive in tangible assets. ROE is the return on equity.
Source: the authors.STI is the group of companies intensive in tangible assets. SII is the group of companies intensive in intangible assets. ROA is the return on assets.
Source: the authors.STI is the group of companies intensive in tangible assets. SII is the group of companies intensive in intangible assets. OM is the operating margin.
Source: the authors.STI is the group of companies intensive in tangible assets. SII is the group of companies intensive in intangible assets. MVA is the market value added.
Source: the authors.STI is the group of companies intensive in tangible assets. SII is the group of companies intensive in intangible assets. EPS is the earnings per share.