Marketing Management/ Strategy/ Branding
Working with a sample of manufacturing and non-manufacturing firms that filed for bankruptcy protection between 1980 and 2009, the current study examines the relationship between investments in intangibles and the likelihood that the bankrupt firm will either be reorganized or face liquidation. Results for the manufacturing sub-sample show that R&D is the only significant variable associated with liquidation. Over-investment in R&D appears to increase the likelihood of liquidation. Similarly, results for the non-manufacturing sub-sample show that over-investment in advertising appears to increase the likelihood of liquidation. Our conclusion is that firms that are forced to liquidate are often guilty of over-investing in intangible assets.
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Digital Commons@Georgia Southern License
Heiens, Richard A.; Leach, Robert T.; and Newsom, Paul D., "The Relationship Between Investments in Intangible Resources and Liquidation for Financially Distressed Firms" (2013). Association of Marketing Theory and Practice Proceedings 2013. 21.