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Financial Constraints, Intangible Assets, and Firm Dynamics :, Theory and Evidence, Sophia Chen

Abstract
I study whether firms' reliance on intangible assets is an important determinant of financing constraints. I construct new measures of firm-level physical and intangible assets using accounting information on U.S. public firms. I find that firms with a higher share of intangible assets in total assets start smaller, grow faster, and have higher Tobin’s q. Asset tangibility predicts firm dynamics and Tobin’s q up to 30 years but has diminishing predicative power. I develop a model of endogenous financial constraints in which firm size and value are limited by the enforceability of financial contracts. Asset tangibility matters because physical and intangible assets differ in their residual value when the contract is repudiated. This mechanism is qualitatively important to explain stylized facts of firm dynamics and Tobin’s q
Table Of Contents
Cover; Contents; I. Introduction; Figures; 1. Intangible Assets, Firm Dynamics, and Q: Stylized Facts; II. The Model; 2. Timing of Events; A. Properties of an Optimal Contract; B. Model Implications; 3. Tobin's Q and Intangible Adjusted Q: Data; 4. Tobin's Q and Intangible Adjusted Q: Simulated Model; III. Empirical Results; A. Data; 5. Intangible Asset, Firm Dynamics and Q: Simulated Model; B. Empirical Findings and Tests of Model Implications; 6. Asset Tangibility Distribution Among Entrants; IV. Conclusion; Tables; 1. Estimated Physical Depreciation Rate
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (39 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781484393758

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