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The Value of Intangible Corporate Assets: An Empirical Study of the Components of Tobin's Q

Author

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  • Bronwyn H. Hall.

Abstract

The relative stock market valuation of the intangible asset created by R&D; investment in U.S. manufacturing firms has fallen from rough equality with ordinary tangible assets during the 1973-1982 period to about twenty to thirty percent of ordinary capital during the 1986-1990 period. At the same time, the relative market valuation of advertising expenditure has risen to parity with R&D; spending. This finding is based on a large comprehensive panel of about 2500 U.S. industrial corporations, covering eighty to ninety percent of industrial R&D; performed by U.S. firms and is robust to industry controls, sample selection, and various specification tests. Possible explanations for the finding are discussed, but definitive answers await future research.

Suggested Citation

  • Bronwyn H. Hall., 1993. "The Value of Intangible Corporate Assets: An Empirical Study of the Components of Tobin's Q," Economics Working Papers 93-207, University of California at Berkeley.
  • Handle: RePEc:ucb:calbwp:93-207
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    Cited by:

    1. Jiang, Crystal X. & Yang, Qin & Li, Sali & Wang, Yong, 2011. "The moderating effect of foreign direct investment intensity on local firms' intangible resources investment and performance implications: A case from China," Journal of International Management, Elsevier, vol. 17(4), pages 291-302.
    2. Blanco Callejo, M, 2007. "LA VENTA DE LA ILUSIÓN Y “LA BRUJA DE ORO”: EL EMBRUJO DE UN CÍRCULO VIRTUOSOi /," Investigaciones Europeas de Dirección y Economía de la Empresa (IEDEE), Academia Europea de Dirección y Economía de la Empresa (AEDEM), vol. 13(3), pages 33-56.
    3. repec:spr:scient:v:80:y:2009:i:3:d:10.1007_s11192-009-2095-2 is not listed on IDEAS
    4. Hall, Bronwyn H. & Mairesse, Jacques, 1995. "Exploring the relationship between R&D and productivity in French manufacturing firms," Journal of Econometrics, Elsevier, vol. 65(1), pages 263-293, January.
    5. Villalonga, Belen, 2004. "Intangible resources, Tobin's q, and sustainability of performance differences," Journal of Economic Behavior & Organization, Elsevier, vol. 54(2), pages 205-230, June.
    6. Bronwyn Hall, 1992. "R&D Tax Policy During the Eighties: Success or Failure?," NBER Working Papers 4240, National Bureau of Economic Research, Inc.
    7. Baum, Christopher F & Thies, Clifford F, 1999. "Q, Cash Flow and Investment: An Econometric Critique," Review of Quantitative Finance and Accounting, Springer, vol. 12(1), pages 35-47, January.
    8. Granstrand, Ove, 2000. "The shift towards intellectual capitalism -- the role of infocom technologies1," Research Policy, Elsevier, vol. 29(9), pages 1061-1080, December.
    9. Yanica Petkova DIMITROVA, 2016. "Communication strategies for reputation management of the company," Romanian Journal of Economics, Institute of National Economy, vol. 43(2(52)), pages 5-13, december.
    10. repec:wsi:rpbfmp:v:11:y:2008:i:02:n:s0219091508001301 is not listed on IDEAS
    11. Sunil Kanwar & Bronwyn H. Hall, 2015. "The Market Value of R&D in Weak Innovation Regimes: Evidence from India," NBER Working Papers 21196, National Bureau of Economic Research, Inc.
    12. Živilė Savickaitė, 2014. "The Evaluation of Company's Intangible Assets' influence for Business Value," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Eastern Macedonia and Thrace Institute of Technology (EMATTECH), Kavala, Greece, vol. 7(3), pages 133-155, December.

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