How Does the Market Value Management Practices? Decomposition of intangible assets

Author Name KAWAKAMI Atsushi  (Gakushuin University) /ASABA Shigeru  (Waseda University)
Creation Date/NO. May 2013 13-E-044
Research Project Study on Intangible Assets in Japan
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This paper examines the extent to which firms' management practices are valued in the marketplace using data from an interview survey. We divide firms' market value into tangible and intangible assets, and further decompose the intangible asset value into the components attributable to advertising, research and development (R&D), and management practices. We find that the component attributable to management practice is much smaller than those attributable to R#D or advertising. We also find that, among various management practices, human resource management has a significantly positive impact on Tobin's q. Some management practice variables, however, have significantly negative impacts on Tobin's q, contrary to the findings of Bloom and Van Reenen (2007; 2010; 2012), to which we referred when we conducted the interview survey. This contradiction may be due to differences in our surveying methods and in good management practices between Japan and other countries.