The role of intangible assets in promoting the sustainability of agri-food enterprises: Evidence from China

Considerable research has explored the relationship between intangible assets and firm performance in manufacturing and tertiary industries, but such studies remain scarce for the agri-food industry. In fact, numerous stresses, including the COVID-19 pandemic, have disrupted many activities along agri-food production chains in developing countries, resulting in huge pressure on sustainable agri-food production. Based on a sample of 94 A-share listed agri-food firms in China from 2008 to 2017, this study examines the impact of intangible assets on agri-food enterprises’ productivity using generalized method of moments estimation. The results reveal differences between private and state-owned enterprises, indicating that the promotional productivity effect of intangible assets held by private agri-food enterprises was insignificant in the current period, but will be manifested three periods later, in contrast to state-owned enterprises. Due to the soft budget constraints and incentive mechanism of state-owned agri-food enterprises, intangible assets will not promote productivity. In addition, by pursuing the financialization profit model, agri-food enterprises will sacrifice productivity improvement, which can further lead to selective abandonment in the use of intangible assets. Simultaneously, there is a crowding-out effect between intangible and fixed assets in promoting agri-food enterprises’ total factor productivity. The findings highlight the importance of the quality and conversion rate of intangible assets, particularly for agri-food enterprises, which are closely related to food security and stability.