Is intangibility a rewarding strategy?A study on European shareholders returns from 1999 to 2019

Abstract

Resource Based View (RBV) and Dynamic Capability approach states that the use of resources within a company is strategical in creating value. As an innovative methodological contribution, a machine learning technique on behalf a predictive proxy was used for generating the Total Shareholder Return (TSR) trends in the European non-financial companies quarterly base data, from 1999-2019. The panel data analysis results bring new insights. The question is not Tangible or Intangible anymore but the nature of Intangibility that is deterministic for the TSR. Therefore, not only Intangible Assets, but Capital Expenses, Administrative Costs, Advertisement, Research and Development and EBITDA were fundamental to create value to TSR. These results are important for management conclusions, both practical and academic, in order to review the current notion of ‘expenses’ elevating them to a strategical role in value creation in the architectural company’s structure.