Role of intangible assets, book value of equity and residual income in value creation: The case study of companies in BRIC countries

Abstract

Goal - to figure out the presence of impact by Book Value of Equity, Residual Income and the Value of Intangible Assets on Market Capitalization in BRIC countries. Objectives: - Define each of the factors analyzed (Book value of Equity, Residual Income, Value of Intangible Assets) - Find out market capitalization of companies in analyzed period - Determine is there an impact of every of these factors on market capitalization of companies After conducting the research based on regression analysis, the presence of impact by intangible assets in two out of four countries was observed, whereas the absence of this impact by book value of equity and residual income in three out of four cases was figured out. Thereby, the goal of the research was achieved and the conclusion was made according to the regression results complimented by the identification on the main trends mentioned in the literature review, that currently there is a trend on the increase of the importance of intangible assets over the tangible ones in process of company’s value creation not only in developed countries, but also in emerging ones.