Using cointegration methods to estimate the interconnectedness of intangible strategic assets

Abstract

PurposeThe aim of this paper is to advocate and implement cointegration methods for the estimation of interconnectedness of service quality and customer loyalty as intangible strategic assets within management decision.Design/methodology/approachUsing longitudinal time series quarterly data on loyalty and service quality, the paper uses cointegration methods to empirically estimate the weight of interconnectedness of customer loyalty and service quality as intangible strategic assets.FindingsThe research evidence suggests that customer loyalty and service quality are interconnected intangible strategic assets that managers can develop, accumulate, estimate and deploy for superior competitive advantage.Originality/valueTo the extent that the global economies are increasingly service‐driven, managerial capability to estimate intangible strategic assets as drivers of superior competitive advantage will remain strategically important. Assumedly, this paper is the first to illustrate how cointegration methods can be used by managers to estimate interconnectedness of intangible strategic assets. In this sense, to the extent that this method is new to managers, it represents another toolkit of intangible strategic asset management for managers.

Value capture mechanism: R & D productivity comparison of SMEs

“…Teece (1986) suggested that firms should invest in complementary assets such as manufacturing, additional know-how, sales channels in a profitable manner when commercializing the invention. Similar to previous studies, the investment in complementary assets results in maximizing profits from inventions (Levin et al, 1987;Cohen et al, 2000;Rothaermel, 2001;James et al, 2013;Onyeaso and Johnson, 2006). Although previous observations support our result, our result is distinguished from previous studies.…”

“…Also, a dominant position of value capture between leading firms and following firms is determined by complementary assets. Therefore, the firm with strengthened complementary assets can acquire much more benefits through innovation than competitors (Onyeaso and Johnson, 2006). If a leading firm that launches a new product or technology with more complementary assets than its competitors; it can reduce the possibility of competitors' free-ride.…”

“…Value capture mechanism assets involve high costs, most SMEs have relatively fewer complementary assets than large enterprises (Bougrain and Haudeville, 2002). Also, since competitive advantages of complementary assets can be obtained or not depending on how expertly the strategy for accessing complementary assets is practiced (Teece, 2003;Onyeaso and Johnson, 2006), the SMEs have a considerable cost and managerial burden to invest in complementary assets. Nonetheless, complementary assets are necessary to generate profits from the value created through innovation activities.…”

The Hidden Effect of Intangible Financial Information on the Market Value of Hospitality Firms in the United States

“…Onyeaso and Johnson (2006) estimated the interconnectedness of intangible strategic assets (service quality and customer loyalty) using cointegration methods. The results supported the perception that service quality would produce repeat purchase behavior (as a measure of loyalty) and enhance organizational performance.…”

The customer satisfaction‐customer loyalty relationship

“…Customer loyalty is a strategic objective for managers (Cooil et al , 2007) and is considered an intangible strategic asset that will enhance organizational performance (Onyeaso and Johnson, 2006). Therefore, investigating its determinants has drawn continuous attention from researchers.…”