INTANGIBILITY AND INNOVATION IN BRAZILIAN COMPANIES

Abstract

This study aims at investigating the relationship between the degree of intangibility, whose definition is based on accounting information, and the degree of innovation in innovating Brazilian companies, measured by the “Índice Brasil de Inovação (IBI)” – Brazil Innovation Index – in order to discover the effects of the recognition of intangible assets in these companies’ assets. It is a descriptive research of a qualitative nature achieved through documental analysis. The secondary data – Standardized Financial Demonstrations (SFD) which provides necessary information for calculating the market value (number of shares multiplied by value of each share) in years 2007, 2008, and 2009 – were collected in the BM&F Bovespa website. This made it possible to measure the index of investments in intangible assets (IIAI) and the degree of intangibility (ID). Results have revealed that: (i) intangibles, such as goodwill, software, trademarks, and patents, in terms of frequency, and intangibles such as goodwill, concessions, software, and Product P&D, in terms of representativeness, are the most significant in the surveyed companies; (ii) companies in more innovative sectors displayed greater IIAIs, which is evidence that these companies channeled more investment on intangibles when compared to companies in less innovative sectors; (iii) in 2009, the average market value of innovative companies more than doubled its own capital value, and this difference was attributed to their intangibles; and, (iv) based on analysis of the ranking of 10 companies with the highest IDs and 10 companies with the lowest IDs, it is not possible to identify any relation between ID and the degree of innovation in surveyed companies.