Intangible assets and superior and sustained performance of innovative Brazilian firms.
| Autor | De Luca, Marcia Martins Mendes |
Introduction
Scholars have long discussed the characteristics and peculiarities of firms which display superior and sustained performance. Many theories have been put forth to identify the determining factors and basic characteristics required to measure and improve business performance. One such theory is the Resource-Based View (RBV), according to which the nature of a firm's resources and accumulated competences are the main cause of variation in performance. To Barney (1991), tangible and intangible resources, combined with competences and controlled by the firm, make it possible to create and implement efficient strategies capable of producing organizational improvements in the long run. Thus, differences in performance between organizations derive from the heterogeneity of their resources (Peteraf, 1993). Scholars such as Wernerfelt (1984), Barney (1991), Peteraf (1993), Teece, Pisano and Shuen (1997) and Penrose (2006) defend the adoption of RBV tenets to maintain long-term sustainable competitive advantage.
Seen from this perspective, resources and competences are distributed heterogeneously among the firms of a given sector as a result of differences in each firm's history and background. Each firm's uniqueness makes it difficult to replicate its resources by acquisition or substitution, creating a potential for competitive advantage (Barney, 1991) and, consequently, superior and sustained performance, at least until its competitors obtain a comparable array of resources (Brito & Vasconcelos, 2004; Carvalho, Kayo, & Martin, 2010).
Intangible assets are resources and competences which may be combined to boost corporate performance. Iudicibus, Martins, Gelbcke, and Santos (2013) point out that while tangible assets are visually identifiable and segregated items in accounting, intangible assets may not be so. Brazilian legislation (Lei n. 11.638, 2007) considers intangible assets incorporeal property destined and used for the maintenance of the firm. In 2008, during the convergence on international accounting standards, the Brazilian Accounting Pronouncements Committee published Technical Statement #4 (Comite de Pronunciamentos Contabeis [CPC], 2008), subsequently modified by CPC #4/R1/2010 (CPC, 2010), defining intangible assets as identifiable non-monetary assets without physical substance. It should be pointed out that the adoption of international accounting standards in Brazil, starting in 2007, is reflected in the peculiar way in which intangible assets are incorporated in the structure of the balance sheet, where they are given the status of noncurrent assets, and in the way their fair value is determined, which in turn influences the way the indicators of an organization's assets are calculated.
Hoog (2008) sees intangible assets as property without physical substance, the useful life of which tends to be subjective, varying according to the rights resulting from ownership and the associated competitive advantages and profits, which may be acquired or developed internally.
To Edvinsson and Malone (1998), Stewart (1999) and Santos and Schmidt (2002), intangible assets are synonymous with intellectual capital or knowledge assets. They add value to the organization and are part of its base of knowledge and information. Thus, for the purpose of this study, the expressions knowledge management, knowledge assets, intangible assets, intangible capital, intangible resources, intellectual capital, goodwill, occult capital, invisible assets and intellectual property refer to the same type of asset, as shown by similarities between the definitions proposed by different authors (Antunes, 2006; Brooking, 1996; Carvalho & Ensslin, 2006; Edvinsson & Malone, 1998; Kaufmann & Schneider, 2004; Lev, 2001; Petty & Guthrie, 2000; Rezende, 2001; Stewart, 1999; Sveiby, 1997).
With regard to the strategic role of intellectual capital and knowledge management, Rezende (2001, p. 17) stated that "knowledge management is the process of creating value through the use of the organization's intangible assets; it is the transformation of information into knowledge, and of knowledge into business". This is the definition adopted in our study.
Regardless of the nomenclature and definitions assigned to intangible assets, in the perspective of RBV this type of asset is generally seen as the main source of competitive advantage because it is inimitable, specific, rare and valuable for the organization (Teixeira & Popadiuk, 2003). The combination of intangible assets consequently improves business performance and competitive advantage. Thus, Kaplan and Norton (1996), Nonaka and Takeuchi (1997), Sveiby (1997), Stewart (1999) and Lev (2001), among others, believe intangible assets are the main factor responsible for the creation of competitive advantage (or disadvantage) in an organization. In other words, a considerable part of the variation in corporate wealth is attributed to intangible assets and their use.
However, results from studies on intangible assets have not always been consistent. Thus, while Villalonga (2004) and Perez and Fama (2006) concluded intangible assets significantly contributed to the superior and sustained performance of US firms, Carvalho, Kayo and Martin (2010) reported opposite effects on Brazilian firms, concluding investments in intangible assets were actually negatively associated with business performance. However, the result of the study may have been influenced by the setting in which it was conducted: the sample consisted of firms from several sectors listed on the Brazilian stock exchange (BM&FBovespa).
Peteraf (1993) defines competitive advantage as sustained, above-normal returns. To Barney and Hesterly (2007), a firm achieves competitive advantage when it creates more economic value than the competitors in its sector or product market. Silva (2009) described a line of research focused on sustained extraordinary profits based on earlier studies by Brozen (1971) and Mueller (1977), who empirically evaluated firms with persistently better results than those of their competitors, that is, with better performance over an extended period of time, and concluded that the abnormal returns observed at a given moment in time were due to some extraordinary factor impacting all firms simultaneously.
According to McGahan and Porter (2002), the persistence of abnormal returns is related to sector and company characteristics, since convergences on abnormal returns are sector and company-specific. The authors also demonstrated that business-specific effects represented by competitive position and other factors influence corporate performance.
These same issues were addressed by Bou and Satorra (2007) in a study of Spanish firms. The authors found that abnormal returns occur when, at a given moment, profit rates vary greatly between firms and sectors and are identified most prominently in organizations whose performance is well above average.
In view of this, despite difficulties in classifying Brazilian innovative firms (Oyadomari, Cardoso, Silva, & Perez, 2010), the sample of the present study consisted of potentially innovative firms included in the Brazilian Innovation Index (Indice Brasil de Inovacao [IBI]). The index was developed by the State University of Campinas (Universidade Estadual de Campinas [UNICAMP]), the UNIEMP Institute and the Sao Paulo State Foundation for Research Aid (Fundacao de Amparo a Pesquisa do Estado de Sao Paulo [FAPESP]), based on results from studies indicating an association between intangible assets and innovative capacity. According to the third edition of the Oslo Manual (which contains guidelines for the collection and interpretation of information on innovation, published in 2005 by the Organization for Economic Co-Operation and Development [OECD]), innovation requires considerable investments, including the acquisition of intangible assets with potential long-term return. In addition, in a study published by the Institute of Applied Economics (Instituto de Pesquisa Economica Aplicada, a public foundation affiliated with the Department of Strategic Affairs of the Brazilian presidency), Tironi and Cruz (2008) highlighted the importance of intangible assets for corporate innovation in the era of knowledge economics and stated that higher levels of innovation require a greater predominance of intangible assets in the innovation process.
Thus, in this study we attempt to answer the question: What is the relation between the composition of investments in intangible assets of innovative firms and corporate performance?. The objective of the study was to investigate whether innovative firms with superior and sustained performance and firms without superior and sustained performance differ with regard to investments in intangible assets. In addition, the relation between investments in intangible assets and the performance of innovative firms was evaluated. Inclusion in IBI level of innovativeness was used as a proxy for innovation capacity. The following hypothesis was formulated:
Hypothesis: A positive relation exists between the composition of investments in intangible assets and the performance of innovative firms.
We adopted the classification proposed by Brooking (1996) which segregates intangible assets into market assets, human-centered assets, intellectual property assets and infrastructure assets. Over the past decade, this classification has been employed by a number of researchers (Bollen, Vergauwen, & Schnieders, 2005; Kot, 2009; Marr, Schiuma, & Neely, 2004) and in a wide range of empirical settings (Antunes, 2005; Antunes & Leite, 2008; Santos, Silva, Gallon, & De Luca, 2011). Furthermore, in view of the study objectives and the importance of collecting corporate data as objective and representative of reality as possible, we used the information on investments in intangible assets provided in the accounting statements of the sampled firms under the...
Para continuar a ler
PEÇA SUA AVALIAÇÃOCOPYRIGHT GALE, Cengage Learning. All rights reserved.
