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Liu, Xing

University of British Columbia

A secular trend in the modern economy is a shift towards intangible capital. Investments in data, knowledge, brand, and employees are central to the creation of intangible assets. How do intangibles help overcome the economic frictions underlying firm and individual decision making, information production, productivity, and market competency? My thesis examines the value of intangible assets in three distinct forms: artificial intelligence (AI), intellectual property, and corporate culture. The first essay examines how AI data processing affects intermediary agents’ decision making and information production when selling insurance contracts. I analyze a large-scale randomized experiment conducted by a top insurance agency in China. I show that AI-generated demand information can augment sales productivity of insurance agents, but might also crowd out human-collected information on consumer risk and exacerbate agency conflicts in a multitasking environment. The second essay examines why mergers and acquisitions (M&As) take place and how M&As shape the product space of the combined firm to achieve synergies. Leveraging the USPTO trademark data to capture the creation and elimination of individual product lines, we show that companies facing greater product market competition are more likely to be acquirers, and M&As create product market synergies as combined companies cut overlapping product offerings, leading to cost efficiency. The third essay examines how firms with a strong corporate culture fare amid the COVID-19 outbreak and identify the underlying mechanisms. We use topic analysis of earnings calls to construct firm-level measures of exposure and responses to COVID-19 following the onset of the crisis. We show that despite the damage COVID-19 inflicts on their operations, firms with a strong corporate culture outperform their peers without it. These firms are more likely to support their community, embrace digital transformation, and develop new products than those peers. We provide support for the hypothesis that corporate culture is an intangible asset designed to meet unforeseen contingencies.

Text

2023-07-14

Attribution-NonCommercial-NoDerivatives 4.0 International

http://hdl.handle.net/2429/85241

Business Administration - Finance

University of British Columbia

UBCV

http://creativecommons.org/licenses/by-nc-nd/4.0/