In the Midst of Crisis: Knowledge Assets and Operating Efficiency of Italian Listed Companies

Firms’ knowledge assets represent vital resources that contribute, in general, to corporate performance and value creation. At an earlier stage, they are expected to help enhance the operational efficiency of firms they belong to. In this light, under a Resource-Based Theory framework, we intend to find whether and to what extent this expectancy is verified also during the recent crisis in Italy. In more detail, we considered 612 firm-year observations relating to the Italian listed companies during three consecutive years - 2010, 2011 and 2012 (when the financial crisis reached its peak in Italy) - analysing overall about 7.000 data/numbers under a Fixed Effects Panel Data Model. The findings are robust: we document a significant positive correlation between Operational Efficiency and Patent assets & Intellectual Property Rights, Goodwill, Trademarks & Licenses, while we do not find a correlation with reference to Research & Development Capital (and Advertising investments), also controlling for employees, leverage and time/sector dummies. In the midst of a very turbulent period, most intellectual assets (the former) appear from the efficiency point of view more valuable and reliable than others (the latter) in hampering the profitability drop. Hence, unlike the tangible and financial assets, such resources are prospected to be strategic levers that make it possible to maintain efficiency or to enable a faster recovery in terms of wasted efficiency. That is, in turbulent times, technology, marketing-related and contractual-legal assets appear significantly associated with operational efficiency and therefore beneficial to corporate results