Intangibles and performance in oil and gas industry

Abstract

Purpose The purpose of this paper is to assess the extent to which financial and market performance of companies in the oil and gas sector can be attributed to the value of their intangibles. Design/methodology/approach The research utilized publicly available data on global oil and gas companies from 2000 to 2015. Panel data analysis was used to assess the relationship between intangibles (measured by Calculated Intangible Value (CIV)) and financial and market performance of these companies. Findings Results show that intangibles had a significant impact on firm performance in multiple financial measures. Firms’ intangibles also influence their market capitalization, indicating that the financial markets discount such information in their pricing. Research limitations/implications Although the impact of intangibles on corporate performance is found to be significant, the size of that impact is small, suggesting that significant increase in the size of intangibles would only lead to a modest increase in corporate performance. Additionally, the research sample was limited to the top oil and gas firms listed in the Fortune 2000 global list and limits the generalization of the findings. Despite these limitations, the research provides greater confidence in using CIV to assess intangibles in organizations. Practical implications This research highlights the importance and ways of measurement of intangibles for managers in oil and gas companies and its significance for their firms’ performance. Originality/value The paper fills the gap in the literature in the assessment of intangibles in the oil and gas sector, as well as in the assessment of using CIV to measure the impact of intangibles on company performance.

Does Intellectual Capital Spur Sustainable Competitive Advantage and Sustainable Growth?: A Study of Chinese and Pakistani Firms

“…For the last several decades, business firms across the globe have been competing for Sustainable Competitive Advantage (SCA) and sustainable growth (SG; Lee & Lee, 2019;Maury, 2018;Xu & Wang, 2018). Some firms invest in intangible resources such as machinery (Shirodkar & Mohr, 2015), land and equipment (Mitra et al, 2016), and technology (Khallaf et al, 2017), whereas other firms prefer investment in intangible resources such as Intellectual Capital (IC), Corporate Social Responsibility (CSR; Sampong et al, 2018), knowledge (Dženopoljac et al, 2019;Ying et al, 2019), and entrepreneurial activities (Kiyabo & Isaga, 2020). In other words, previous studies have suggested several determinants that can spur firms' SCA and SG (Lee & Lee, 2019;Maury, 2018;Xu & Wang, 2018).…”

Strategic planning key factor in tangible–intangible results in microenterprises

“…On the other hand, non-financial performance is defined as the intangible performance that an organization (Dženopoljac et al, 2019;Molodchik et al, 2019;Zigan and Zeglat, 2010) has obtained over its competitors in the market, in terms of quality, cost advantage, timely delivery, sales volume and market share (Hoque and James, 2000;Mia and Clarke, 1999;Noordin et al, 2015). Based on the above, the following hypothesis is established:…”

Intellectual capital as a longitudinal predictor of company performance in a developing economy

“…This makes it more user‐friendly. Therefore, academic researchers in this field tend to use VAIC more often, and only a few research studies have successfully applied CIV (e.g., Dzenopoljac et al, 2019; Kennedy, 1998; McClure, 2019).…”

“…However, one certainty is the uncertainty of investments in intangibles. Although few studies included time as the factor of the IC‐performance relationship (Dzenopoljac et al, 2019), many companies realize the existence of a significant time lag between IC investments and their positive (or negative) effect on company performance. Moreover, IC performance is perceived to be “distant” from financial performance as that the succession of events and the time lags are difficult to define and quantify.…”