Propensity in intangible investments: Firm heterogeneity among publicly listed ASEAN consumer discretionary and consumer staples firms

Much recently, intangible assets have grown in significance and in relevance in the accounting profession as continuous innovations in the different facets of the economy take place. The heterogeneity in terms of propensity to invest is what is being investigated by the authors of this research, which in other words is what accounts for the difference in the tendency or inclination to invest in intangible assets. The ASEAN member countries are also the designated population in this research, more specifically, firms from consumer discretionary and consumer staples sectors, owing to the fact that such a study has not yet been conducted previously along with the increasing importance of the economic bloc. Factors that were observed under the 5-year period 2006 to 2010 included firm size, investment in human capital, organizational complexity, and intangible asset base. With the use of two models, probit and quantile regression, the likelihood of a firm being an intangible investing firm given its intangible asset intensity for 2014 is determined. As a result, factors such as size and investment in human capital, two out of the four hypotheses, has been found to have a significant effect on the probability of determining whether a firm is an intangible-asset-investing firm or not. However, there exists a negative relationship between size and a firms likelihood of being an intangible-asset-investing firm. This opens the door for further investigations on why there is an odd negative relationship considering that the number of employees is a potential cost driver for the human capital investments