The relationship between intangible assets and profitability is a broadly studied topic, albeit less in the context of small and medium enterprises (SMEs) or unquoted firms. The objective of this paper is to examine whether intangible assets and goodwill enhance financial performance. Contributing to fill this research gap and based on the resource-based view and knowledge-based view theories, it is used a balanced panel data of 5.020 Portuguese SMEs for the period from 2013 to 2023. The results from the fixed-effects model evidence a significant negative effect of intangible assets and goodwill in financial performance. It is also evidenced the moderating effect exerted by firm age and the presence of significant differences between sectors of activity. Given the SMEs importance in most countries, the results and implications of this paper can be generalised to other economies, albeit country specific cultural, accounting and legal issues should be taken in consideration.
Luís Miguel Pacheco (Wed,) studied this question.