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Intangible assets and their effects on business performance: an analysis for Colombian companies

Author

Listed:
  • Alberto Méndez-Morales
  • Camilo Anzola-Morales
  • Liliana Elizabeth Ruiz-Acosta
  • David Andrés Camargo-Mayorga

Abstract

Intangible assets (IAs) are fundamental for the creation of firm value. However, the literature is inconclusive regarding the relationship between IAs and profitability. This paper uses financial data from Colombian firms from 2005 to 2015 to determine if this relationship exists. Thirty dynamic panel models have been used to see whether IAs are related to Return on Equity, Return on Assets, Earnings Before Interest and Taxes, Earnings Before Interest, Taxes, Depreciation, and Amortization, Gross margin, and Net margin. The results, despite a limited sample size and missing variables, are related to the literature in that they signal the negative relationship between IAs and profitability. Thus, the capitalized value of IAs seems to negatively affect Colombian firms' performance in the short and long term.

Suggested Citation

  • Alberto Méndez-Morales & Camilo Anzola-Morales & Liliana Elizabeth Ruiz-Acosta & David Andrés Camargo-Mayorga, 2024. "Intangible assets and their effects on business performance: an analysis for Colombian companies," Revista Galega de Economía, University of Santiago de Compostela. Faculty of Economics and Business., vol. 33(1), pages 1-28.
    • Handle: RePEc:sdo:regaec:v:33:y:2024:i:1_6
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    More about this item

    Keywords

    Profitability; Dynamic panel model; Accounting practices; Unbalanced panels; IFRS;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M49 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Other

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