Companies' investment strategies for intangibles
The research group intends to contribute to the field of empirical corporate finance since designs a model of value creation explaining the relationship among companies' intangibles, competitive advantages and the attractiveness of investment. It will be considered that managers seek to make a company competitive and attractive for investors. Investors meanwhile search for companies with a higher potential to grow in their value. These decision-making processes are complicated in conditions of incomplete information. Accounting these assumptions the results of research could be formulated as follows:
- Firstly, the theoretical model of principal agent conflict by investing in intangible resources should be elaborated.
- Secondly, we expect to develop existing methods of portfolio forming on the base of fundamental analysis by including intangibles quantity and quality.
- We also expect that investments in intangibles lead to higher stock returns. As far as intangible assets can create competitive advantage and cause an increase in company value, investors should treat investments in intangible assets as a positive signal and increase their expectations.
- Fourthly, it is expected that the disclosure of information about company's intangibles substantially decrease information asymmetry.
- We suppose to find out that some intangibles appear to be insignificant for companies' competitive advantages but still are perceived by shareholders as a positive signal and drive attractiveness of companies for investors.
- The investments in intangibles make company's activity and therefore its shares riskier. So, we expect that higher stock returns volatility is connected with intangible assets.
- Additionally, we suppose to justify empirically that specific features of different countries and industries affect investor perception of information on investments in intangible resources. So we will investigate environmental features and type of stock markets that perceive companies' investments in intellectual capital.
Intangibles and economic crisis
This line investigates factors of corporate success over the crisis period of 2008– 2009. We advocate the idea that investments in intangibles allow a company to be better off, even if the markets go down. The hypothesis put forward in this article was tested on a sample of more than 300 companies which operate in developed and emerging European markets, and belong to traditional and innovative industries.
We also investigate whether it is reasonable for companies to intensify intangibles when markets fall. This line aims to find empirical evidence that companies with a clear intangible-intensive profile are likely to outperform those without a strategy. The results established shed some light on the global economic crisis in 2008-2009. More than 1600 European companies were involved in the empirical analysis. The findings of this study demonstrate that companies with a conservative profile in intangibles outperform moderate and innovative ones. Still an innovative profile enables a faster recovery after a crisis.
Managing intellectual capital in small&medium business
In the framework of SME’s knowledge chain analysis the research group attempts to design a model of transformation of intangibles into a company’s performance. We seek to provide empirical evidence into theoretical discussion of resource-based view, particularly of the concept of dynamic capabilities and the theory of knowledge-based firm. The capabilities of intangibles as enhancers of SME’s performance are widely presented in theory and empirically tested mostly for companies on developed markets. The potential value of our research consists in discovering the peculiarities of the employment of intangibles in developing countries. One more attractive research focus in SME’s analysis concerns the role of intangibles during the crisis period as well as during the economic recovery. In considering this premise we expect the following results:
- To develop existing research methodology by elaborating a questionnaire taking into account language and cultural aspects for cross-country survey. This tool is expected to contribute to standardization of scientific analysis towards intangible resources in global context.
- To justify empirically the set of constructs (in term of structural equation modeling) for different intangible resources, SME’s dynamic capabilities, strategic competitive advantages and financial performance.
- To discover the core intangibles that increase SME’s performance in developing countries. These results seem to have a wide practical implication enabling growth of SMEs.
- To support the hypothesis of complementary relationship between different intangibles resources and find out the best model of interrelationship of intangibles according to goodness of fit criteria.
- To find out external (country-level; region-level; industry-level) factors that support or obstruct the transformation of intangible resources into competitive advantages.
- To support the hypothesis about the pivotal role of intangibles during the economic crisis.
Drivers of competitiveness of Russian companies
Recent years we have seen the expanding gap in competitiveness of Russian companies comparing to their international rivals. The underdevelopment of Russian domestic production led to the significant share of import in Russian economy. The import share in different sectors ranges from 25 to 70% and has been growing every year starting from early 2000s (World Economic Forum, 2014). Notably, that about 43% of the average consumer basket in 2014 in Russia contains import products (World Economic Forum, 2014). The recent economic and political challenges that were faced by the Russian economy have demonstrated the substantial harm of the existent structure of our trade balance. High level of import of the high-technological product along with the predominance of the raw materials in export led to the considerable dependency of the Russian economy on the value of the ruble and world prices of minerals. The problem of an insufficient competitiveness of Russian companies was considerably exacerbated while knowledge-based economy arose. Our sectors are behind both in a quality and costs of the product. That is brought by a low productivity, obsolete technologies employed and significant outflow of human resources.
The research goal of this line is to reveal the traits of strategic behavior regarding intangibles with perspective to global competitiveness. We also search for the incentives of companies to switch to the intangible-intensive strategy. Main empirical issue in this project concerns the gap in the endowment of intangible resources of Russian companies with respect to their European rivals. The research group assumes that this lack in endowment of intangibles is the origin of the low competitiveness and investment attractiveness of Russian companies.
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