Intangible Value

Andrea L. Eisfeldt, Edward T. Kim, Dimitris Papanikolaou*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

6 Scopus citations


Intangible assets are absent from traditional measures of firm value despite their growing importance in firms' capital stocks. We propose a simple improvement to the classic Fama and French (1992, 1993) value factor that incorporates intangibles and addresses differences in accounting practices across industries. Our intangible value factor prices assets as well as or better than the traditional value factor but yields substantially higher returns. This outperformance holds over the entire sample period, including in more recent decades during which value has underperformed. We show that the intangible value factor sorts more effectively within industries on productivity, profitability, financial soundness, and on other valuation ratios such as price-to-earnings.

Original languageEnglish (US)
Pages (from-to)299-332
Number of pages34
JournalCritical Finance Review
Issue number2
StatePublished - May 3 2022
Externally publishedYes


  • Intangible assets
  • Intangible capital
  • Value factor
  • Value investing

ASJC Scopus subject areas

  • Finance


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