“Ovidius” University Annals, Economic Sciences Series

Volume XXI, Issue 2 /2021

The Impact of Investments in Intangible Assets and Implications on

SMEs’ Performance. A Systematic Literature Review

Roxana-Gabriela Mozolea
"Alexandru Ioan Cuza" University of Iasi,
Doctoral School of Economics and Business Administration, Romania
roxana.mozolea@yahoo.com
Sorin Gabriel Anton
"Alexandru Ioan Cuza" University of Iasi,
Faculty of Economics and Business Administration, Romania
sorin.anton@uaic.ro

Abstract

Investments in intangible assets have become a strategic approach that has led to numerous
benefits and boosts the firms’ performance. Academics have studied the process, but there is no
complete picture of how intangible resources impact SMEs’ performance, this being the main
motivation of the paper. The methodology applied is a systematic literature review and it consisted
in applying a pre-selected criterion for retrieving the articles from the Web of Science database. The
analysis showed that the impact of investments in intangible assets and implications on SMEs
existing literature can be divided into six general lines of research. Scholars can use the study as a
starting point to fill in research gaps relating to the relationship between intangible assets and SMEs’
performance, while practitioners can use the data to determine the effects of this type of investment
and how to use efficiently SMEs’ resources.

Key words: intangible assets; systematic literature review; SMEs; performance; intangible
resources.
J.E.L. classification: E22, G32, M20, O34.

1. Introduction

Intangible assets have become in the latest decades one of the most important factors in increasing
profitability, developing innovation, and creating a competitive advantage for companies to stand
out for the consumers (Ivanov and Mayorova, 2015; Khan et al., 2018; Ocak and Findik, 2019;
Piekkola, 2020). The value of intangible assets has increased due to technological evolution, the
boost of brands’ importance, the need for differentiation and the globalization process. Definitions
and classifications of intangible assets are diverse, but the common theory presents them as non-
monetary assets, without physical substance, that bring internal economic advantages, respectively
increasing market value (McClure, 2009).
The importance of intangible assets can be easily observed in various statistical research
conducted both in the United States of America and Europe. In 2019, Aon and Ponemon Institute
LLC showed the evolution of intangible versus tangible assets market value from top 5 S&P 500
companies, the timeframe selected being 1975 – 2018. The results show a clear change, starting in
1975 with a value of 0.122 $T intangibles and 0.595 $T tangibles versus 2018 with a value of 21.03
$T intangibles and 4 $T tangibles. Also, in 2020, Ocean Tomo conducted a study that showed the
changes in the weight of intangibles assets, considering the market value, from companies included
in the S&P 500 over the last 45 years. In 1975, 17% of the total market value was represented by
intangible assets and in 2020 they weighted 90%, highlighting how relevant are in todays’ business
(see Figure 1).

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Figure no 1. Intangible assets – Market value in S&P 500

Source: Ocean Tomo, LLC Intangible Asset Market Value Study, 2020

The evolution of investments in intangible assets, both in public and private companies, was
observed also in European states. In 2018, Eurostat and European Central Bank led a study that
analyzed the growth of investments in intangible assets; one of the results showed that during the last
20 years, the investments in intellectual property exceeded the total investments in tangible assets.
Intangible assets have always been a complex and controversial topic both for accountants and
economists, but also for national and international institutions that are in charge of managing and
evaluating them. Since the 1920s’, when assets were recorded according to their estimated value,
intangible assets have become an object of attention. After the severe worldwide economic
depression that started in 1929, the accountants have changed the recording method of assets,
respectively the new criteria for recognizing them were pre-existing transactions. Once the IT
industry and the technological field has advanced so rapidly and the focus shifted from the production
area to services, companies have built and developed strong competitive advantages based on
intangible assets.
Analyzing the accounting regulations, we can observe that the main types of intangible assets are
goodwill, brand equity, intellectual property (trademarks, patents, copyrights), research and
development. Considering this perspective, Stolowy and Jeny-Cazavan (2001) present two ways of
defining intangible assets: a conceptual approach by developing a definition and a practical approach,
by creating a list of assets that can be recognized in the future. Most of the countries use a combined
method designed to offer more clarity by using a definition and a list.
This paper aims to analyze the existing literature regarding investments in intangible assets and
how they influence SMEs’ performance. To address the research goal, we investigated the papers
indexed on the Web of Science database under a specific criterion and developed a systematic
literature review. As such, this study provides a new perspective of the current state of literature and
numerous research opportunities.
The study is structured as follows: theoretical background, the methodology applied in the paper
selection, the findings and the theoretical and practical implication of the findings.

2. Theoretical background

Two of the most important international accounting standards-setting bodies, the International
Accounting Standards Board (IASB) and the U.S Securities and Exchange Commission (SEC)
developed different sets of accounting and financial standards: IFRS, respectively U.S. GAAP. The
first set of standards is used in more than 120 countries; for example, all public companies from
European Union are compelled to apply these rules in any financial report or presentation. The second
set of standards applies only in the U.S., where all public and private firms are forced to respect them,

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except private, foreign companies that can apply IFRS. Numerous specialists analyzed these
regulations and observed both similarities and differences, including the topic of interest of this
article, intangible assets. Over the last decades, these entities are working together to adapt and to
align the standards, to avoid misunderstands and to offer more clarity.
Under IFRS, intangible assets are regulated accordingly to the standards from IAS 38, issued by
IASB. They are illustrated as non-monetary assets, without physical substance, identifiable either as
separate or as a result of contractual or other legal rights. U.S GAAP presents a similar definition,
without the identifiable characteristic, but it is mentioned in the recognizing criteria.
One of the first efforts to create an international accounting standard regarding intangible assets
was the issue of IAS 9 in 1978 which stated that research and development costs should be recorded
as expenses unless the outcome of these activities is an asset. Since that moment, numerous
modifications were made to clarify different aspects like amortization and depreciation or businesses
combination.
According to IAS 38, intangible assets are classified from numerous perspectives: how they were
acquired (bought - by separate purchase or as a part of a business combination or internal generated),
by lifetime (determined – license or unlimited – reputation) and by content and use (intellectual
capital, intellectual property, technological applications). Many researchers proposed other methods
of classification. For example, Lev (2001) recommended an economic approach that separates
intangible assets based on innovation, human resources and organization, explaining their value for
the companies. In a subsequent study, Lev (2005) changes slightly the presented classification: he
shifts the focus from innovation to other categories focused on products/services and relations with
clients, highlighting the importance of customers loyalty and the value of the brands. Another
perspective, based on value-added, is presented by Mortensen et al. (1997) by dividing intangible
assets into four categories: innovation capital (research and development), structural capital,
contracts, market capital, and goodwill.
Criteria for recording financial investments in an intangible asset as an expense is respecting the
above-stated definition, the certification of a future economic advantage and correct identification of
the cost. IAS 38 presents some challenging examples where the cost is difficult to be determined:
internally generated brands, internal clients list, etc. Usually, companies divide the process of
generating internal intangible assets into two stages: the research phase and the development phase.
If there is no clear distinction between these two stages, all inquired expenses are recorded into the
research phase.
The debates and the interest in intangible assets have been in a constant evolution, numerous
authors focusing on the competite advantages they bring into the companies. Mehta and Madhani
(2008) analyzed the existing literature review on intangible assets and they concluded that there is a
direct, positive relation with companies’ performance, being reliable sustianbility indicators. For
public companies, investments in non-physical assets improve financial performance (Salamudin et
al., 2010; Quan et al., 2020), increase the market value (Leliuc, 2018) and influence positively the
liquidity ratios (Mendoza et al., 2017). Hintzmann et a. (2021) published a study where they analyzed
the implications of intangible assets on work productivity, the sample consisted in data from 18
European countries with a time-frame of 22 years. The results showed that intangible assets,
especially R&D and marketing have a strong impact on increasing work productivity. In countries
from Northern Europe, intangible assets have a stronger impact than tangible assets, in Central
Europe the results are opposite and in the Southern Europe, the impacts are comparable.
Considering both the interest of national and international regulating bodies on intangible assets,
and also the effort invested in numerous studies that focused on this topic, we intend to make sense
of the current research landscape and highlight many promising areas for future-related analysis by
evaluating the current body of literature.

3. Research methodology

Numerous studies confirm the development and the importance of intangible assets by conducting
a comparative analysis between the market value and the book value of the companies. For example,
McClure (2009) selected 3.500 U.S. large businesses and showed that the book value is only 28%
from the market value, in contrast to the year 1975 when deviation was only 5%. The same

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conclusion was made by Ocean Tomo (2010) when they analyzed the value from financial reports,
which was only 20% of the market value. Despite numerous articles related to intangible assets and
companies’ performance, there remain several gaps in the literature, one of them being if and how
investments in intangible resources influence small and medium-sized enterprises (SMEs) economic
results.
The choice of interest in small and medium-sized enterprises (SMEs) is based on the fact they are
a core part of economies around the world, especially for the emerging and developing countries in
which they generate important financial revenues and contribute to job creations, respectively
reducing the unemployment (Bell, 2015). The World Bank states that 90% of worldwide businesses
are SMEs and they sustain more than 50% of the employment, in emerging economies contributing
by 40% to the GDP. In addition, their research estimates an increase in job demand that will be partly
covered by SMEs. The World Bank emphasizes the role of SMEs and why they should be a top
priority for governments, themselves offering important financial support for creating and
developing this economic area. There are numerous financial support programs designed for SMEs;
for example, European Union provides access to many resources for implementation and
development, considering that 99% of registered businesses are SMEs.
The motivation of this paper is to assess the existing literature on investments in intangible assets
and the implications on SMEs’ performance, to examine the current state of specialized literature
development and to discover future research opportunities. To the best of our knowledge, a detailed
literature review on the impact of investments in intangible assets and implications on SMEs’
performance doesn’t exist up to date.
The methodology selected for rigorously analyzing the research conducted on the above-stated
topic is a systematic literature review. This approach has been used mainly in medical science, but
it is increasing in the economic field due to its advantages that imply a transparent, efficient, and
objective (Snyder et al., 2016; Fombelle and Kristensson, 2016). By conducting a systematic
literature review, it can be determined if there is a constant across articles, if there are different results
and what may be the source and to detect possible directions for expanding a certain subject. In order
to answer a clearly articulated objective, a systematic literature review (SLR) identifies, selects, and
critically assess information (Dewey and Drahota, 2016). Before the systematic review is undertaken,
the criteria should be explicitly outlined in a clearly defined methodology or plan. It's a transparent,
thorough search that spans several databases and grey literature and can be replicated by other
academics. It entails devising a well-thought-out search strategy that focuses on a certain topic or
answers a specific topic. Within established timeframes, the review indicates the sort of information
searched, criticized, and reported. The review must include the search terms, search tactics and limits.
Papers selection was conducted in two phases. The first part was based on retrieving papers
related to intangible assets and SMEs from Web of Science, a complex citation database that contains
more than 80 million records from 256 disciplines. In the research process, there were used several
expressions (intangible assets, SMEs, small and medium-sized enterprises, small and medium
enterprises, intangible resources) in order to discover relevant articles and to minimize redundancy.
Papers had to meet the following criteria for inclusion: (a) written in the English language &
published in a peer-reviewed academic journal; there were excluded books, book chapters, non-
refereed publications, and discussion papers.
The second phase of the selection process is to select the papers with high scientific quality, by
ranking the journals based on SJR score and H index score. This information is retrieved from the
website http://www.scimagojr.com; SJR (Scimago Journal Rank) score is a quality measure of a
journal and the H index shows the number of articles and the number of citations. The Journal
Citation Reports published by Thomson Reuters gives annually rankings of science and social
science journals named Impact Factor (IF) data. Quartiles are used for rankings: Q1 denotes the top
25% of the IF distribution, Q2 for the middle-high position (between top 50% and top 25%), Q3
middle-low position (top 75% to top 50%), and Q4 the lowest position (bottom 25% of the IF
distribution).

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4. Findings

The first phase of the selection process produced 100 articles. The second part consisted in
ranking the journals of the 100 papers and selecting only the ones with SJR score above 1 and
included in Q1 & Q2 (68 articles - Table 1) in line with Grimaldi et al. (2017), Torres-Carrión et al.
(2018) and Nichita (2019).

Table no. 1 Journals of the articles selected in phase 1

Source Title SJR Best Quartile SJR H index Count of Articles
JOURNAL OF INTELLECTUAL CAPITAL Q1 1,26 89 7
SUSTAINABILITY Q1 0,61 85 5
SMALL BUSINESS ECONOMICS Q1 2,20 131 5
INTERNATIONAL MARKETING REVIEW Q1 1,20 89 2
JOURNAL OF KNOWLEDGE MANAGEMENT Q1 1,84 113 2
BRITISH FOOD JOURNAL Q2 0,51 80 2
QUALITATIVE MARKET RESEARCH Q2 0,65 54 2
ECONOMIA POLITICA Q2 0,47 13 2
AMFITEATRU ECONOMIC Q2 0,34 20 2
EUROPEAN JOURNAL OF INNOVATION MANAGEMENT Q2 0,78 63 2
INTERNATIONAL ENTREPRENEURSHIP AND MANAGEMENT JOURNAL Q1 1,34 55 2
JOURNAL OF BUSINESS ECONOMICS AND MANAGEMENT Q2 0,49 37 2
SOCIAL INDICATORS RESEARCH Q1 0,82 107 1
MANAGEMENT DECISION Q1 0,92 98 1
JOURNAL OF ORGANIZATIONAL AND END USER COMPUTING Q2 0,46 32 1
HELIYON Q1 0,46 28 1
EUROPEAN JOURNAL OF SCIENCE AND THEOLOGY Q1 0,49 18 1
INTERNATIONAL BUSINESS REVIEW Q1 1,77 95 1
JOURNAL OF INTERNATIONAL BUSINESS STUDIES Q1 4,82 195 1
CREATIVITY AND INNOVATION MANAGEMENT Q1 1,15 60 1
JOURNAL OF SUSTAINABLE TOURISM Q1 1,73 103 1
INTERNATIONAL FOOD AND AGRIBUSINESS MANAGEMENT REVIEW Q2 0,47 35 1
MATHEMATICS Q2 0,50 32 1
INTERNATIONAL JOURNAL OF ENTREPRENEURSHIP AND INNOVATION Q2 0,60 16 1
SERVICE INDUSTRIES JOURNAL Q1 1,18 66 1
INTERNATIONAL JOURNAL OF MANPOWER Q2 0,44 58 1
EXPERT SYSTEMS WITH APPLICATIONS Q1 1,37 207 1
INTERNATIONAL JOURNAL OF ORGANIZATIONAL ANALYSIS Q2 0,42 25 1
CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTAL MANAGEMENT Q1 1,52 73 1
INTERNATIONAL JOURNAL OF PRODUCTION RESEARCH Q1 1,91 142 1
JOURNAL OF SCIENCE AND TECHNOLOGY POLICY MANAGEMENT Q2 0,47 16 1
BUSINESS STRATEGY AND THE ENVIRONMENT Q1 2,12 105 1
KYBERNETES Q2 0,31 40 1
AGRIBUSINESS Q2 0,57 43 1
MANAGEMENT RESEARCH REVIEW Q2 0,56 53 1
JOURNAL OF BUSINESS RESEARCH Q1 2,05 195 1
OECONOMIA COPERNICANA Q1 0,59 13 1
JOURNAL OF BUSINESS VENTURING Q1 7,11 182 1
REVIEW OF INTERNATIONAL BUSINESS AND STRATEGY Q2 0,56 29 1
JOURNAL OF CLEANER PRODUCTION Q1 1,94 200 1
EUROPEAN MANAGEMENT JOURNAL Q1 1,37 102 1
JOURNAL OF ENTREPRENEURSHIP IN EMERGING ECONOMIES Q1 0,65 15 1
EVALUATION AND PROGRAM PLANNING Q2 0,56 62 1
JOURNAL OF INFORMATION SCIENCE Q1 0,50 64 1
ENVIRONMENTAL SCIENCE AND POLLUTION RESEARCH Q2 0,85 113 1
Grand Total 68

Source: Personal approach of the authors

The next step was analyzing the sample reduced to 68 articles from 45 journals, to discover which
of them are in the scope of our research. After a preliminary screening of the abstract of the emergent
articles, we eliminated those that do not fall under the research question, the final pool consisting of
22 papers (Table 2).

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Table no. 2 Articles selected in phase 2

Author Full Names Article Title Source Title

Agostini, Lara; Caviggioli, Does patenting influence SME sales European Journal of
Federico; Filippini, Roberto; performance? A quantity and quality analysis of Innovation
Nosella, Anna patents in Northern Italy Management
Enhancing radical innovation performance Journal of
Agostini, Lara; Nosella, Anna
through intellectual capital components Intellectual Capital
Amadieu, Paul; Viviani, Jean- Intangible Effort and Performance: The Case of
Agribusiness
Laurent the French Wine Industry
The influence of firm age and intangible
Anderson, Brian S.; Eshima, resources on the relationship between Journal of Business
Yoshihiro entrepreneurial orientation and firm growth Venturing
among Japanese SMEs
Marketing management capability: the construct
Brown, Dalila; Foroudi, Qualitative Market
and its dimensions An examination of managers'
Pantea; Hafeez, Khalid Research
and entrepreneurs' perceptions in a retail setting
Carmona, Pedro; Momparler, The performance of entrepreneurial small- and Service Industries
Alexandre; Gieure, Clara medium-sized enterprises Journal
Creativity and
Crema, Maria; Verbano, Managing Intellectual Capital in Italian
Innovation
Chiara Manufacturing SMEs
Management
Business models, intangibles and firm
Cucculelli, Marco; Bettinelli, performance: evidence on corporate Small Business
Cristina entrepreneurship from Italian manufacturing Economics
SMEs
Returnee entrepreneurs and firm performance in International
Dai, Ou; Liu, Xiaohui
Chinese high-technology industries Business Review
Foroudi, Pantea; Gupta,
Digital technology and marketing management Qualitative Market
Suraksha; Nazarian, Alireza;
capability: achieving growth in SMEs Research
Duda, Marta
Journal of
Catch a Fad or Capture a Value? Social Media Organizational and
He, Xiaoyun; Lu, Haibing
Leverage in SMEs End User
Computing
Khalique, Muhammad; Hina,
Khushbakht; Ramayah, T.; Intellectual capital in tourism SMEs in Azad Journal of
bin Shaari, Jamal Abdul Jammu and Kashmir, Pakistan Intellectual Capital
Nassir
Khan, Kashif Ullah; Atlas, Impact of intangible resources (dominant logic)
European Journal of
Fouzia; Ghani, Usman; on SMEs innovation performance, the mediating
Innovation
Akhtar, Sadia; Khan, Farhan role of dynamic managerial capabilities: evidence
Management
from China
Corporate Social
Investment in intangible resources and
Khan, Sher Zaman; Yang, Responsibility and
capabilities spurs sustainable competitive
Qing; Waheed, Abdul Environmental
advantage and firm performance
Management
Journal of
Knight, Gary A.; Kim, International business competence and the
International
Daekwan contemporary firm
Business Studies
Nunes, Paulo Macas; The Quadratic Relationship between Intangible Amfiteatru
Almeida, Alcina Assets and Growth in Portuguese SMEs Economic

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Ramos-Gonzalez, Maria del International

Effects of socially responsible human resource
Mar; Rubio-Andres, Entrepreneurship
management (SR-HRM) on innovation and
Mercedes; Sastre-Castillo, and Management
reputation in entrepreneurial SMEs
Miguel Angel Journal
Review of
From intangible resources to export performance:
International
Rua, Orlando Lima Exploring the mediating effect of absorptive
Business and
capabilities and innovation
Strategy
Rua, Orlando; Franca, Journal of
Key drivers of SMEs export performance: the
Alexandra; Fernandez Ortiz, Knowledge
mediating effect of competitive advantage
Ruben Management
Intangible Assets Investment and Firms' Journal of Business
Seo, Hyeon Sik; Kim,
Performance: Evidence from Small and Medium- Economics and
YoungJun
Sized Enterprises in Korea Management
Strielkowski, Wadim;
Mathematical Modeling of Intellectual Capital
Guliyeva, Aida; Rzayeva,
and Business Efficiency of Small and Medium Mathematics
Ulviyya; Korneeva, Elena;
Enterprises
Sherstobitova, Anna
The Role of a Manager's Intangible Capabilities
Ying, Qianwei; Hassan,
in Resource Acquisition and Sustainable Sustainability
Hazrat; Ahmad, Habib
Competitive Performance
Source: Personal approach of the authors

The content analysis can be divided into some broad categories: intellectual capital and SMEs
performance (6 articles); intangible assets/resources and SMEs performance (4 articles); intangible
assets effect on innovation and innovation impact on SMEs’ performance (4 articles); marketing and
social media and SMEs’ performance (3 articles); intangible resources and SMEs’ export
performance (2 articles); entrepreneurial orientation and capabilities and SMEs’ performance (2
articles); international business competence (IBC – intangible asset) and international performance
of SMEs (1 article).

4.1 Intellectual capital and SMEs’ performance

Crema and Verbano (2014) analyzed the relationship between intellectual capital (IC) and Italian
manufacturing SMEs. According to existing literature, authors select human capital (HC), internal
structural capital (ISC) and relational capital (RC). Conclusions show that Italian manufacturing
SMEs have well-developed HC, moderately developed RC and heterogeneous results for ISC. The
firm’s performance is positively influenced by IC components.
Agostini and Nosella (2017) focused on the relationship between intellectual capital (IC)
components (human capital, relational capital and organizational capital) and radical innovation
performance. The sample contains 975 Italian SMEs and the applied methodology is hierarchical
regression. The conclusion is that human capital positively influences the relational and
organizational capital, which enhance radical innovation performance. This means that employees
represent a critical part of the growing reputation and innovation of SMEs.
Khan et al. (2018) published a study on 329 Pakistani SMEs, respectively if sustainable
competitive advantage (SCA) and firm performance (FP) are positively influenced by intellectual
capital (IC), financial capability (FC), and corporate social responsibility (CSR). The methodology
used is the structural equation model (SEM) and data was collected through surveys. The conclusions
show that IC, FC and CSR have a strong, positive impact on SCA and FP. In addition, SCA has a
mediating role in the relations between FC, respectively CSR and FP, and it emphasizes the
importance of investments in IC and intangible resources in general.
Khalique et al. (2018) proposed a study regarding the influence of intellectual capital (IC) on the
organizational performance of a sample of Pakistani SMEs from the tourism industry. According to
scientific literature, IC incorporates six components: human capital, customer capital, structural
capital, social capital, technological capital and structural capital (Khalique et al., 2011). The
research concluded that IC, as an overall concept, has a positive impact on organizational
performance. Separately, the most influential components were the customer and technological

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capital. Human capital, social capital and spiritual capital are characterized with medium influence
and structural capital appears as a negatively significant variable.
Ying et al. (2019) proposed a study regarding the impact of managers’ intangible capabilities in
sustainable competitive performance with a mediating role of resource acquisition. The sample
consists of data from 384 owners/managers of Pakistani SMEs, collected through questionnaires.
The results show that intellectual capital (IC) is relevant in both resource aquation and sustainable
competitive performance. In addition, especially SMEs that have limited resources should enhance
managers intangible capabilities in resource aquation.
Strielkowski et al. (2021) used mathematical models to test the influence of intellectual capital
(IC) on 206 SMEs from CIS countries. IC components selected for this study are human capital,
structural capital, and customer capital. The findings show that IC is not utilized by the management
of SMEs in CIS countries, but it is demonstrated that it positively influences the performance, in
combination with financial resources and with some important reservations.
The above articles show that intellectual capital brings valuable advantages to SMEs that invest
in this type of intangible assets and both managers and employees are a key part of businesses
development.

4.2 Intangible assets/resources and SMEs’ performance

Nunes and Almeida (2009) published an article regarding the impact of intangible assets on the
Portuguese SMEs’ performance. The sample was selected from the SABI database and authors
retrieved information from 1383 SMEs during 1999 and 2005. The results show that it exists a
quadric relation between intangible assets and SMEs growth, the intangible resources being a
catalyzing factor. In addition, the findings reflect a negative relationship between both the age and
the size of the firms and the growth of SMEs; the performance is also accelerated by internal finance.
Amadieu and Viviani (2010) published a study that focuses on the influence of intangibles on the
financial performance of wine industry French SMEs. The fundamental takeaway is that investing in
intangibles does not ensure financial success for French wineries. Intangible expenses have a
favourable impact on commercial performance for enterprises more involved in the marketing
process, such as wholesalers, but there is no transition into financial performance, implying that cash
flows created by these investments are insufficient.
Cucculelli and Bettinelli (2014) focused on 376 Italian SMEs over 10 years (2000-2010) to
analyze the performance by business models and investments in intangible assets (R&D and
advertising on sales). The used statistical method is regression and selected dependent variables for
quantifying performance are return on sales (ROS) and total factor productivity (TFP). The results
show that SMEs’ performance is positively influenced by both business models changes and
investments in intangible assets, separately and together. In addition, the empirical evidence shows
that business model innovations support more effectively the ROS and intangibles influence more
the TFP.
Seo and Kim (2019) analyzed in their paper the impact of investments in intangible assets on
Korean SMEs’ performance. The sample consists of 173 production firms that invest in intangible
assets: human capital, marketing and R&D. Statistical method applied is regression, the dependent
variable being firm performance and the independent variables being the above investments in
intangible assets. The results show that SMEs’ performance and market value is positively influenced
by investments in intangible assets and that should motivate firms from both public and private sector
from Korea to invest in this kind of assets.
Intangible assets are valuable investments that influence positively SMEs’ performance.
According to the journals above, the most widely used methodology is statistical analysis,
respectively regression.

4.3 Intangible assets effect on innovation and innovation impact on SMEs’ performance
Carmona et al. (2012) published a comparative study on SMEs’ performance considering the
innovative or non-innovative characteristics. The sample contains in 3.217 firms: 2.471 non-
innovative and 746 innovative. Authors use intangible assets as a proxy for innovation (Lev, 2001).
The results show that innovative firms perform better than non-innovative ones and they have
numerous advantages, including lower tax rates.

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Agostini et al. (2014) analyzed the impact of patents on the performance of 196 Italian SMEs.
The methodology applied consists of cross-sectional time-series regression. Patents are one of the
most important and highly used intangible assets. The results show that overall, patents influence
positively SMEs’ performance, but the increase in the number of patents doesn’t imply an increase
in achievements. One of the most relevant findings is that SMEs should prioritize the investments in
patents and should select only the patents that relate to the core part of the business and that bring
value to the firm.
Khan et al. (2020) published an analysis on the relation and influence of intangible resources
(dominant logic) on Chinese SMEs innovation performance. In addition, the research questions focus
on the mediating role of dynamic managerial capabilities. Dominant logic consists of two parts:
information filter (pro-activeness and external orientation) and routines (learning and routines and
dynamic managerial capabilities refer to managerial human capital, managerial social capital and
managerial cognition. The results show that innovation performance is positively impacted by the
use of intangible resources, respectively dominant logic. Another conclusion of this study, that
confirms the previous findings in the literature review, highlights the importance of managerial
capabilities as they are valuable intangible resources, and they bring valuable competitive
advantages.
Ramos-González et al. (2020) analyzed the influence of socially responsible human resource
management (SR-HRM) on two of the most important intangible assets, innovation and reputation.
The sample consists of 261 SMEs and the methodology was partial least squares (PLS). Results show
intangible assets have a strong relation, while innovation has a significant and positive influence on
reputation in SMEs. In addition. SR-HRM impacts positively both SMEs innovation and reputation
level, essential aspects for firms’ performance.
The results show that investments in intangible assets impact positively innovation and the
performance of SMEs. In addition, they bring competitive advantages and help businesses in
differentiation.

4.4 Marketing and social media and SMEs’ performance

He and Lu (2016) focused on the impact of using social media on SMEs’ performance. The
sample consists of 146 U.S. SMEs. The results confirm the previous findings from the specialized
existing literature (Fournier and Avery, 2011; Kaplan and Haenlein, 2010; Laroche et al., 2013),
respectively that investments in social media can create valuable intangible assets. In addition,
SMEs’ managers should focus on the online community that is built due to social media activity and
that these efforts bring value and differentiation in long term.
Brown et al. (2019) focused in their paper on the relationship between intangible assets and
marketing capabilities. Data was gathered through 19 interviews with managers and entrepreneurs
from 12 UK SMEs from the retail industry. The findings of this study show that a company's
communication with internal and external stakeholders about critical aspects of management,
marketing, customer relationships, communication, innovation, and performance skills can become
clearer and more valued through intangible assets.
Foroudi et al. (2019) proposed an article with the intent to assess the relation between digital
technology, tangible/intangible assets and marketing management capabilities in the case of UK
SMEs. The results show that marketing capabilities are strongly influenced by digital technology and
they impact the growth of SMEs’ performance.
Data were collected mainly through surveys and the findings recommend to managers invest in
marketing activities and social media activity to create customers loyalty and to engage communities
for the SMEs’ performance.

4.5 Intangible resources and SMEs’ export performance

Rua, Franca and Ortiz (2018) focused on what are the main determinants of 247 Portuguese
SMEs’ export performance (EP). The authors developed a model to test if entrepreneurial orientation,
intangible resources, and absorptive capabilities have a positive relation with EP and if this relation
is mediated by competitive strategies, cost leadership or differentiation. Intangible resources consist
of reputational resources, access to financial resources, human resources, cultural resources,
relational resources and informational (knowledge) resources (Morgan et al., 2006). The results show

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that intangible resources positively influence the development of cost leadership and even more,
differentiation. There is no direct connection between intangible resources and EP, but through
strategy, they become key drivers to SMEs’ export performance.
On a similar sample, Rua (2018) published another study that focused on the impact of intangible
assets on export performance, taking into account the mediating role of absorptive capabilities and
innovation. Intangible resources have a positive, significant, and direct impact on absorptive
capabilities and export performance but no significant and direct impact on innovation. Absorptive
capabilities have no influence on the export performance, but innovation has a positive, significant,
and direct impact on export performance and it also implies a mediating effect on the relationship
between intangible resources and export performance.
Both articles show that SMEs’ export performance is positively influenced by investments in
intangible resources, either by being key drivers or by direct impact.

4.6 Entrepreneurial orientation and capabilities and SMEs’ performance

Anderson and Eshima (2013) published a study on the relationship between entrepreneurial
orientation (EO) and firm growth, under the influence of firm age and intangible resource advantage
on a sample of 207 Japanese SMEs. Intangible resource advantage consists in measuring employee
know-how, managerial systems, company reputation, intellectual property, and informal social
networks. The authors applied hierarchical linear regression analysis, and the conclusions show that
even though EO increases, without intangible resource advantage, the firms don’t significantly grow;
also, younger SMEs can experience higher growth levels in combination with higher EO than the
older firms.
Dai and Liu (2009) proposed a comparative analysis between returning and local entrepreneurs
and their impact on Chinese SMEs’ performance from high-tech industries. The results show that
returning entrepreneurs (who studied or worked in OECD countries) use their intangible resources
in terms of commercial and technological know-how and overperform the local entrepreneurs and
positively influence companies’ growth.
The conclusions of the above studies show that entrepreneurial orientation combined with
intangible capabilities influence positively the growth of Chinese and Japanese SMEs.

4.7 International business competence (IBC – intangible asset) and international performance
of SMEs
Knight and Kim (2008) analyzed what is the connection between international business
competence (IBC) and the international performance of SMEs. According to the specialized
literature, IBC is itself an intangible, a concept that includes intangible assets and competencies
(Lambe, Spekman and Hunt, 2002; Ritter and Gemunden, 2004; Johnson and Sohi, 2003; Johnson et
al., 2006). Considering that the scope of the research was analyzing SMEs that developed abroad,
the authors included: in IBC international orientation, international marketing skills, international
innovativeness, and international market orientation. The data was gathered through case study
interviews (16 SMEs – first phase) and surveys (354 SMEs – second phase). The results emphasize
that IBC is important in the internationalization of companies, especially for SMEs, that don’t rely
on the same amount of financial and tangible assets as large companies do.

5. Conclusions

This paper provides a systematic review of the scientific literature about the impact of investments
in intangible assets on SMEs’ performance. In the last decades, the importance of intangible
resources has increased dramatically, and the growth of businesses has been directly connected to
this type of asset.
We conducted a systematic literature review that was based on a sample of 22 high-quality peer-
reviewed articles obtained through a rigorous data collection process and selection from Web of
Science. After proceeding with the pre-selected criteria and understanding which papers apply to our
research questions, the 22 articles were classified into five macro themes: intellectual capital and
SMEs’ performance (6 articles); intangible assets/resources and SMEs’ performance (4 articles);
intangible assets effect on innovation and innovation impact on SMEs’ performance (4 articles);

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marketing and social media and SMEs’ performance (3 articles); intangible resources and SMEs’
export performance (2 articles); entrepreneurial orientation and capabilities and SMEs’ performance
(2 articles); international business competence (IBC – intangible asset) and international performance
of SMEs (1 article).
To the best of our knowledge, these are the most important articles regarding the impact of
investments in intangible assets on SMEs’ performance. The results of the analysis show that
intangible assets are positive influencers, either as a whole concept or as a separate intangible
resource like innovation, marketing, or entrepreneurial orientation on businesses development.
Several academic and practical implications are presented in our study. Firstly, through this paper,
we bring valuable information regarding the status of the research – the impact of the investments in
intangible assets on SMEs’ performance. The conclusions show that there is a research gap in the
existing literature and there are numerous future directions to test and validate the findings of the
analysis. Secondly, managers and entrepreneurs should analyze the above relationship and consider
that the resources of SMEs are limited, and any investment must have profitable returns.
Limitations of our analysis are mainly related to our paper selection process and choice of data.
Our source was the Web of Science database and other researchers might conduct this literature
review by using other sources, for example, Scopus. In addition, the criteria can be changed and
include other words or expressions to find relevant articles to observe the constant effect of
investments in intangible assets.

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