The contribution of intangible assets and expenditures to shareholder value

The present study investigates the role of intangible assets and expenditures in the search for shareholder value. Recognizing the limitation of traditional financial measures of performance, this study assesses the impact of intangible assets and expenditures on a direct measure of corporate shareholder accountability, market-adjusted holding period returns. Utilizing a sample of 1,657 actively traded manufacturing firms, the results indicate that advertising, goodwill, and research and development do not have significant positive impact on shareholder value, as measured by holding period returns. Instead, only intangible assets other than goodwill, which include the value of patents, copyrights, licenses, and trademarks, have a positive impact on shareholder value.