Intangible Asset Dynamics and Firm Behaviour

We study the adoption of different patterns of intangible asset (IA) accumulation in manufacturing firms. Contrary to most of the previous literature, we find such patterns to be highly differentiated. In particular, we identify three types of firm behaviour: high and persistent, low and persistent, and discontinuous. We link the capability-based view of the firm to theories of asset complementarities and market signalling to explain how firm-specific traits affect such behaviours. We obtain the following results: first, the persistent accumulation of IAs is favoured by the internal availability of highly skilled personnel; second, firms with (a) large IA base and (b) high propensity to exploit complementarities in the asset stocks are more likely to persistently accumulate IAs than to discontinuously or never accumulate IAs and third, the adoption of quality management standards facilitates the accumulation of IAs, especially if this is done discontinuously. This paper adds to the previous literature in two ways: first, it highlights the existence of great heterogeneity in the dynamics of IA accumulation and, second, it provides an explanation for such heterogeneity.