The impact of intangibles on firms’ financial and market performance: UK evidence

Yasean A. Tahat (Lead / Corresponding author), Ahmed H. Ahmed, Mohammad M. Alhadab

    Research output: Contribution to journalArticle

    7 Citations (Scopus)

    Abstract

    This study provides empirical evidence about the effect of intangible assets on firms’ current and future financial and market performance by utilizing a sample the UK FTSE 150 nonfinancial companies. Generally, the findings of this examination reported a strong evidence on the role of intangibles in boosting firms’ performance. In particular, the results indicate that while goodwill (GW) does have a statistically positive effect on firms’ current and future performance, research and development (R&D) is only associated with firms’ future performance. The results of the current research is consistent with the market-based and resources-based theories which posits that intangible investments are the main driving factors of wealth creation in the long-run; Specifically, R&D operations can create new technologies and products that would enhance firms’ performance and value. In addition, the results reveal that both GW and R&D can explain variations in firms’ financial performance measures suggesting that such investments can enhance firms’ earning leading to capitalization such earnings in the market value. Finally, the results of this research provide practical implication for policy makers and managers.

    Original languageEnglish
    Pages (from-to)1147-1168
    Number of pages22
    JournalReview of Quantitative Finance and Accounting
    Volume50
    Issue number4
    Early online date21 Jul 2017
    DOIs
    Publication statusPublished - 1 May 2018

    Fingerprint

    Intangibles
    Market performance
    Financial performance
    Firm performance
    Goodwill
    Managers
    Market value
    Performance measures
    Resource-based theory
    Factors
    Capitalization
    Empirical evidence
    Wealth creation
    Firm value
    Politicians
    Boosting
    Intangible assets

    Keywords

    • Goodwill
    • Performance
    • Research and development
    • UK
    • Valuation

    Cite this

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    The impact of intangibles on firms’ financial and market performance : UK evidence. / Tahat, Yasean A. (Lead / Corresponding author); Ahmed, Ahmed H.; Alhadab, Mohammad M.

    In: Review of Quantitative Finance and Accounting, Vol. 50, No. 4, 01.05.2018, p. 1147-1168.

    Research output: Contribution to journalArticle

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