Open AccessEFFECT OF INTANGIBLE ASSETS ON VALUE RELEVANCE: EVIDENCE FROM LISTED MANUFACTURING FIRMS IN NIGERIA
Author(s) -
Ephraim Oryina Mue,
Salami Suleiman
Publication year - 2020
Publication title -
journal of economics and sustainability
Language(s) - English
Resource type - Journals
ISSN - 2637-1294
DOI - 10.32890/jes2020.2.2.4
Subject(s) - goodwill , book value , intangible asset , business , stock exchange , value (mathematics) , relevance (law) , intellectual property , asset (computer security) , business operations , marketing , accounting , market value , intangible good , industrial organization , commerce , finance , economics , earnings , computer security , economy , machine learning , computer science , political science , law , operating system
The increasing importance and role of intangible assets in today’s economic environment isa source of concern for scholars and accounting practitioners. As an attempt to explore therelevance of reported intangible assets, the study investigated the market value relevance ofdifferent intangible asset (intellectual properties, computer software cost, and goodwill)reported by listed manufacturing firms in Nigeria. To achieve the research objective, thestudy adopted a correlational research design. The study utilized secondary data extractedfrom the annual reports and accounts of manufacturing firms listed on the Nigerian stockexchange. The study concentrated on firms that reported components of intangible assets forsix years (2013-2019). The model was estimated using the random effect regressiontechnique. The findings revealed intellectual properties to be positively and significantlyassociated with the market value of listed manufacturing firms in Nigeria. However,goodwill was shown to have a negative and significant relationship with market value. Basedon the findings, the study recommends, amongst others, that the management ofmanufacturing firms bring their expertise to develop innovative technologies and businessadaptations, as well as direct policies that will improve brand names and trademarks andprotect patents and other intellectual properties as they will impact the market price.