Abstract:
In the modern knowledge economy, intangible assets play a vital role in creating
value for shareholders, particularly the wealth of intangible assets and
information content of announcements of intellectual property rights for the first
time. Thus, measuring and analyzing the impact of intangible assets and IP
announcements on shareholders’ wealth is a decisive effort in the direction of
creating a company’s value. In the 21st century, the driving force of creating
wealth for companies and economies is the information on innovation in
information and communication technology. These paradigm changes have
induced, firms to increasingly adapt to technological advancement and
innovations in the recent past. Therefore, this paper aims to shed light on how
intangible assets and IP announcements impact shareholders’ wealth of the
world’s top eight (08) brands, which are American-based technology companies.
The IP portfolios and the announcements of intellectual property rights for the
period 2005 to 2019 were considered for the analysis. The findings revealed that
goodwill and patents were showing a positive significant impact on the
shareholders’ wealth, while trademarks and trade secrets were indicating a
positive, however, insignificant impact on shareholders’ wealth. Further, IP
announcements significantly impacted the shareholders’ wealth followed by
abnormal returns in the short run. This paper, therefore 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 the IP announcements. The study also directs the research
literature into a new direction towards identifying the impact of intellectual
property announcements on shareholders’ wealth of industry of technology.
Further, the findings of current research will assist in forecasting the future
development vision of information technology companies based on intangible
assets.
