As companies increasingly compete on the basis of technology, brand, and knowledge, a new study reveals that the effectiveness of corporate boards plays a critical role in maximizing the value of intangible assets—especially during international expansion through acquisitions.
In a study recently published in the Global Strategy Journal, researchers Xavier Martin (Tilburg University) and Tao Han (emlyon business school) analyzed 675 cross-border acquisitions by U.S. public firms to understand how intangible assets contribute to firm value abroad—and under what conditions.
Their findings are clear: while firms with high R&D and advertising intensity generally enjoy stronger market reactions to foreign acquisitions, those benefits are significantly enhanced when the company's board is structured for effective governance.
"Intangible assets like proprietary technologies or brands are central to global competitiveness," said Professor Martin. "But they travel poorly across borders. Without the right oversight and strategic insight at the board level, firms risk leaving substantial value on the table."
The research assessed market returns using event-study methodology and focused on two key types of intangibles—technology (measured by R&D intensity) and marketing (measured by advertising intensity). Crucially, the study matched each acquisition with four critical dimensions of board effectiveness:
- Independence: Boards with a higher proportion of independent (non-executive) directors and a clear separation of CEO and board chair roles
- Expertise: Directors with international managerial experience
- Bandwidth: Fewer overextended board members (i.e., those serving on multiple boards)
- Motivation: Higher director share ownership aligning board interests with shareholder value
The study found that companies with boards scoring highly on these dimensions achieved greater abnormal stock returns following acquisition announcements, especially when deploying technology-intensive strategies abroad. The results suggest that effective governance structures help companies navigate the challenges of internationalizing intangibles—including information gaps, unfamiliar markets, and strategic disclosure decisions.
These insights are timely given the escalating global race for innovation leadership, particularly in fast-moving sectors like artificial intelligence. As investment in intangibles grows, so does the need for governance models that can translate such assets into sustained competitive advantage.
"Our study underscores that it's not enough for firms to invest in R&D or build strong brands," said Professor Han. "They must also empower their boards to provide the oversight, expertise, and incentive alignment needed to realize that value in complex global markets."
The findings offer actionable takeaways for corporate leaders, investors, and policymakers seeking to strengthen international performance. As intangible assets become ever more central to value creation, companies must view board governance as a strategic asset in its own right.
To read the full context of the study and its methods, access the full paper available in the Global Strategy Journal .
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