Effects of the Growth of Intangible Capital Value on Firms

Abstract

This paper discusses the effects of the growth of intangible capital value on firms after a thorough synthesis of over 20 sources. It begins by noting how the increased importance and prevalence of intangible assets and intellectual property, such as patents, trademarks, and copyrights, in the world economy over the past few decades has influenced various business activities and corporate decisions. These impacts range from changes in the competitive landscape within sectors to how firms borrow and choose targets for acquisition. From these impacts, it is hypothesized that the burgeoning growth of intangi ble capital will affect firms ’ ability to borrow, how and why they decide to merge or produce new products, and international trade deals. With these changes, it is imperative that there will be further policies enacted to cover intangible capital and intellectual property usage during international trade agreements due to their heightened importance, changes within anticompe titive and antitrust legislation that take intangible capital into greater ac count, and a furthering of new legislation that pushes back against anticompetitive intellectual property rights and patent trolls. Lastly, this paper concludes by highlighting the disparate influence of intangible capital on two unique industries: fashion and technology, along with suggestions on how to bette r protect intangible assets in the future.