Intangible Investment and Firm Value in Japan (Japanese)

Corporate-owned assets can be broadly divided into tangible (buildings, structures, etc.) and intangible (knowledge, technology, human resource, etc.). In recent years, efforts have been widely made to construct a quantitative assessment (visualization) of the latter. According to Hulten and Hao (2008), this paper tries to measure two intangible assets—research and development (R&D) stock and organization capital—and investigates their effect on firms' value. Accordingly, it turns out that firms' accumulation of intangible assets positively influences their value in Japan. Moreover, this paper estimates the investment function which makes Tobin's q an explanatory variable including intangible assets. As a result, the coefficient of Tobin's q is positive and significant. This implies that taking into account of intangible assets is important in modeling capital investment action.