IMPACT OF INTANGIBLE ASSETS AND INTELLECTUAL PROPERTY ANNOUNCEMENTS ON SHAREHOLDERS’ WEALTH: EVIDENCE FROM TOP BRANDED AMERICAN TECHNOLOGY COMPANIES

Abstract

In the modern knowledge economy, intangible assets have become an emerging trend of creating shareholders’ value of companies, particularly intangible assets and announcements of intellectual property rights. Thus, measuring and analyzing the impact of intangible assets and the announcement of intellectual property (IP) on shareholders’ wealth is a decisive effort in the direction of creating the company’s value. Therefore, this paper aims to shed light on how intangible assets and intellectual property announcements impact on shareholders’ wealth of the world’s top eight (08) brands which are American based technology companies. The research was conducted based on four intangible assets including goodwill, patent, trademark, and trade secret, and the impact of these variables on shareholders’ wealth was assessed and evaluated using the panel data regression model. Moreover, the influence of intellectual property announcements on shareholders’ wealth was measured by using the abnormal returns of companies that are analyzed using the event study methodology. The study revealed that goodwill and patent were showing a positive significant impact on the shareholders’ wealth while trademark and trade Secret were indicating a positive, however, insignificant impact on shareholders’ wealth. Further, intellectual property announcements were positively and significantly impacted on the shareholders’ wealth followed by the abnormal returns in the short run. Based on the findings the study concluded that goodwill, patent, and IP announcements significantly impact on maximizing the shareholders’ wealth. The study directs the research literature into a new direction towards identifying the impact of intellectual property announcements on shareholders’ wealth of industry of technology. This research recommends that the shareholders of technological firms can obtain higher returns through the Patent and Goodwill, and further justifies that they can maximize the shareholders’ wealth through intellectual property announcements.