The Intangibles Premium

46 Pages Posted: 28 Apr 2023

See all articles by Dion Bongaerts

Dion Bongaerts

Erasmus University Rotterdam (EUR) - Finance

Xiaowei Kang

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Mathijs A. van Dijk

Erasmus University Rotterdam (EUR)


We investigate the nature of cross-sectional asset pricing effects of intangibles. Intangible asset intensity relates strongly positively to stock returns and has more explanatory power than size, value, profitability, and investment. Adding an intangibles factor improves the Fama-French five-factor model and makes the investment factor redundant. Importantly, intangibles matter more as a characteristic than as a risk factor. Further, intangibles hardly predict future earnings and EBITDA growth (valuation-relevant performance metrics affected by accounting conservatism concerning intangibles) but strongly predict gross profit growth (unaffected by such accounting practices). Our evidence is consistent with investor underreaction to intangibles resulting from accounting conservatism.

Keywords: Intangible Assets, Asset Pricing, Information Complexity, Mispricing, Investor Underreaction.

Suggested Citation

Bongaerts, Dion and Kang, Xiaowei and van Dijk, Mathijs A., The Intangibles Premium. Available at SSRN: or

Dion Bongaerts (Contact Author)

Erasmus University Rotterdam (EUR) - Finance ( email )

Burgemeester Oudlaan 50
Rotterdam, 3062PA
+31 (0) 10 40 82 790 (Phone)
+31 (0) 10 40 89 017 (Fax)


Xiaowei Kang

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR

Mathijs A. Van Dijk

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics