I Made Wianto Putra

Type of the article: Research Article

Abstract
Intangible assets play a significant role in the New Economy period we currently live in, yet their capitalization remains challenging due to high failure rates in innovation. The purpose of this study is to investigate the circumstances under which businesses have the potential to raise the future value of using their intangible assets. This study used publicly listed firms on the Indonesia Stock Exchange (IDX) from 2019 to 2024. The final sample comprises 1,974 firm-years that satisfy the selection criteria. A multiple regression analysis was carried out for the assessments. The findings show that the sole possession of intangible assets is insufficient to raise the value of the companies and explicitly shows a negative effect (coefficient = –0.1443, t-value = –2.406). However, the interaction tests reveal that to boost future excess returns, businesses possessing intangible assets are required to demonstrate earnings growth (coefficient = 0.0142, t-value = 2.388) and a strong price-to-book ratio (coefficient = 0.0627, t-value = 7.441). Furthermore, a sector-specific analysis reveals that these results diverge for the technology and healthcare sectors, where intangible assets fail to explain future excess returns (F-statistics = 3.912 and 8.299, respectively). This investigation suggests that the impact of intangible assets on firm value is not uniform; rather, it is contingent upon specific corporate financial fundamentals and industry contexts, proving that investors require validation of innovation through profitability and market strength.