Intangible investments and cost of equity capital: An empirical research on Vietnamese firms
AbstractTogether with the development of knowledge-based economy, investment in intangibles has been dramatically increasing. Although intangibles are widely recognized as primary value drivers for more firms, as evidence of many studies related to the value relevance or the market valuation of inta...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Taylor & Francis Group
2023-12-01
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| Series: | Cogent Economics & Finance |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23322039.2022.2163075 |
| _version_ | 1797658366290427904 |
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| author | Trinh Hiep Thien Nguyen Xuan Hung |
| author_facet | Trinh Hiep Thien Nguyen Xuan Hung |
| author_sort | Trinh Hiep Thien |
| collection | DOAJ |
| description | AbstractTogether with the development of knowledge-based economy, investment in intangibles has been dramatically increasing. Although intangibles are widely recognized as primary value drivers for more firms, as evidence of many studies related to the value relevance or the market valuation of intangible investments, little is known in the literature about the cost of equity capital for financing intangible investments, especially in Vietnamese literature extent. This paper’s aim is therefore to empirically investigate the association between a firm’s cost of equity capital and intangible investments detailed by research and development investment, business combination investment and organizational capital investment. We investigate the above relationship through the sample of 120 Vietnamese-listed firms from 2013–2017. Regression result confirmed that both higher level of research and development investment and larger amount of accounting goodwill raise the firm’s overall cost of equity capital since their characteristics of these investments are riskier and less liquid and has a higher level of information asymmetry. Our findings could suggest several implications for managers and shareholders in making their investment decisions. Once again, this study adds to the existing business valuation literature by providing additional evidence of the impact of research and development investment as well goodwill on accounting for equity capital valuation. |
| first_indexed | 2024-03-11T17:58:04Z |
| format | Article |
| id | doaj.art-7b3607c32d204f809d2fd7d8e85c551a |
| institution | Directory Open Access Journal |
| issn | 2332-2039 |
| language | English |
| last_indexed | 2024-03-11T17:58:04Z |
| publishDate | 2023-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Economics & Finance |
| spelling | doaj.art-7b3607c32d204f809d2fd7d8e85c551a2023-10-17T10:51:06ZengTaylor & Francis GroupCogent Economics & Finance2332-20392023-12-0111110.1080/23322039.2022.2163075Intangible investments and cost of equity capital: An empirical research on Vietnamese firmsTrinh Hiep Thien0Nguyen Xuan Hung1School of Accounting, College of Business, University of Economics Ho Chi Minh City (UEH University), Ho Chi Minh, VietnamSchool of Accounting, College of Business, University of Economics Ho Chi Minh City (UEH University), Ho Chi Minh, VietnamAbstractTogether with the development of knowledge-based economy, investment in intangibles has been dramatically increasing. Although intangibles are widely recognized as primary value drivers for more firms, as evidence of many studies related to the value relevance or the market valuation of intangible investments, little is known in the literature about the cost of equity capital for financing intangible investments, especially in Vietnamese literature extent. This paper’s aim is therefore to empirically investigate the association between a firm’s cost of equity capital and intangible investments detailed by research and development investment, business combination investment and organizational capital investment. We investigate the above relationship through the sample of 120 Vietnamese-listed firms from 2013–2017. Regression result confirmed that both higher level of research and development investment and larger amount of accounting goodwill raise the firm’s overall cost of equity capital since their characteristics of these investments are riskier and less liquid and has a higher level of information asymmetry. Our findings could suggest several implications for managers and shareholders in making their investment decisions. Once again, this study adds to the existing business valuation literature by providing additional evidence of the impact of research and development investment as well goodwill on accounting for equity capital valuation.https://www.tandfonline.com/doi/10.1080/23322039.2022.2163075intangible investmentscost of equity capitalresearch and development investmentorganizational capital investmentG10M10 |
| spellingShingle | Trinh Hiep Thien Nguyen Xuan Hung Intangible investments and cost of equity capital: An empirical research on Vietnamese firms Cogent Economics & Finance intangible investments cost of equity capital research and development investment organizational capital investment G10 M10 |
| title | Intangible investments and cost of equity capital: An empirical research on Vietnamese firms |
| title_full | Intangible investments and cost of equity capital: An empirical research on Vietnamese firms |
| title_fullStr | Intangible investments and cost of equity capital: An empirical research on Vietnamese firms |
| title_full_unstemmed | Intangible investments and cost of equity capital: An empirical research on Vietnamese firms |
| title_short | Intangible investments and cost of equity capital: An empirical research on Vietnamese firms |
| title_sort | intangible investments and cost of equity capital an empirical research on vietnamese firms |
| topic | intangible investments cost of equity capital research and development investment organizational capital investment G10 M10 |
| url | https://www.tandfonline.com/doi/10.1080/23322039.2022.2163075 |
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