Intangible assets dynamics and firm behaviour
AbstractWe study the adoption of different intangible investment strategies in manufacturing firms. Contrary to most of the previous literature, we find such strategies to be highly differentiated. In particular we identify three types of investment behaviour: high and persistent, low and persistent, discontinuous. Using as a reference the capability-based view of the firm, we define and provide support for a set of hypotheses on the determinants of such behaviours. We obtain the following results: first, absorptive capacity led by R&D expenditures is a key competence in sustaining the adoption of an intangible investment strategy, which may be either persistent or discontinuous; second, the implementation of a persistent intangible investment strategy necessarily requires specific investments in the quality of human resources to be made; third, firms with a greater propensity to operate in international markets are more likely to adopt a persistent intangible investment strategy than they are to adopt a discontinuous one; fourth, firms that undertake a growth path that is based on highly uncertain demand segments and high organisational flexibility are likely to adopt a discontinuous intangible investment strategy; and five, the historical intangible asset base represents an important constraint on firms’ investment behaviour.
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Bibliographic InfoPaper provided by Department of Economics, Parma University (Italy) in its series Economics Department Working Papers with number 2012-EP05.
Length: 42 pages
Date of creation: 2012
Date of revision:
intangibles; firm behaviour; asset accumulation; organisational capabilities; R&D; investment strategy;
Find related papers by JEL classification:
- D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
- L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-17 (All new papers)
- NEP-BEC-2012-11-17 (Business Economics)
- NEP-HME-2012-11-17 (Heterodox Microeconomics)
- NEP-INO-2012-11-17 (Innovation)
- NEP-KNM-2012-11-17 (Knowledge Management & Knowledge Economy)
- NEP-SBM-2012-11-17 (Small Business Management)
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