Agency in Intangibles

53 Pages Posted: 16 Sep 2018 Last revised: 25 Apr 2019

See all articles by Colin Ward

Colin Ward

University of Minnesota - Carlson School of Management

Date Written: April 23, 2019


I argue that intangible assets promote agency conflicts between outside investors and inside specialists. I build a microfoundation for why highly intangible firms underinvest despite high profitability and valuations---a challenge for standard theories. This and several other model predictions are supported in the data. I also study trends in investment, profitability, valuations, compensation, idiosyncratic risk, and financing and conclude that the rise of intangibles have likely aggravated agency problems.

Keywords: intangible capital, dynamic contracting, principal-agent, investment

JEL Classification: D21, E22, G31, G32, L22

Suggested Citation

Ward, Colin, Agency in Intangibles (April 23, 2019). Available at SSRN: or

Colin Ward (Contact Author)

University of Minnesota - Carlson School of Management ( email )

Carlson School of Management
321 19th Avenue South
Minneapolis, MN 55455
United States

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