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Impact of Intangible Assets on Profitability of Hong Kong Listed Information Technology Companies

Author

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  • Hanran Li

  • Wenshu Wang

Abstract

The objective of our study is to find out the relationship between intangible assets and financial performance of the listed technology firms in Hong Kong exchange market. Through reviewing the listed firms¡¯ annual reports for a five year period (from 2008 to 2012), we have collected data of three kinds of intangible assets, which are research and development cost, employee benefit expense, and sales training. Meanwhile, we have used total assets and net profit as control variables in analyzing the relationship between intangible assets and financial performance, represented by return on assets (ROA) of firms. Using lagged R&D expenditure as instrumental variable; our results suggested that research and development investment and sales training are beneficial to firms¡¯ financial performance while employee benefit expense is not.

Suggested Citation

  • Hanran Li & Wenshu Wang, 2014. "Impact of Intangible Assets on Profitability of Hong Kong Listed Information Technology Companies," Business and Economic Research, Macrothink Institute, vol. 4(2), pages 98-113, December.
    • Handle: RePEc:mth:ber888:v:4:y:2014:i:2:p:98-113
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    Cited by:

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    2. Mike Onder Kaymaz & Ilker Yilmaz & Ozgur Kaymaz, 2019. "The Impact Of Intangible Factors On Profitability: Evidence From Corporations Traded At Muscat Securities Market In Oman," Copernican Journal of Finance & Accounting, Uniwersytet Mikolaja Kopernika, vol. 8(2), pages 25-47.
    3. Milenović Jovana & Bonić Ljiljana & Krstić Bojan, 2024. "Impact of Intellectual Capital Efficiency on Profitability: The Case of Information Technology Companies on the NYSE," Economic Themes, Sciendo, vol. 62(3), pages 389-412.
    4. Bayelign Abebe Zelalem & Ayalew Ali Abebe, 2022. "Does intangible assets affect the financial performance and policy of commercial banks’ in the emerging market?," PLOS ONE, Public Library of Science, vol. 17(8), pages 1-19, August.
    5. Nishant B. Labhane & Ramesh Chandra Das, 2015. "Determinants of Dividend Payout Ratio: Evidence from Indian Companies," Business and Economic Research, Macrothink Institute, vol. 5(2), pages 217-241, December.

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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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