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New Study Reveals Strong Board Oversight Key to Unlocking Value of Intangible Assets Abroad

August 5, 2025
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In today’s rapidly evolving global economy, companies increasingly pivot on intangible assets such as proprietary technologies, brand equity, and organizational knowledge to secure competitive advantages. However, capturing the true value of these intangibles, especially during international expansions via cross-border acquisitions, remains a formidable challenge. A groundbreaking study published in the Global Strategy Journal now spotlights a critical yet often overlooked factor in this equation: the effectiveness of corporate boards. Through rigorous analysis, the research reveals how the structure and quality of board governance can significantly enhance the value generated from intangible assets during foreign acquisitions, a finding with far-reaching implications for corporate strategists and investors alike.

The authors, Xavier Martin of Tilburg University and Tao Han from emlyon business school, undertook an extensive empirical investigation into 675 cross-border acquisitions conducted by publicly listed U.S. firms. By applying sophisticated event-study methodologies that measure abnormal stock market returns, the researchers meticulously quantified how variations in firms’ intangible capital—measured notably by R&D intensity and advertising expenditure—interact with board governance attributes to influence market reactions to acquisition announcements. Their findings offer illuminating insights into the intricate dynamics at play when firms endeavor to internationalize intangibles in complex foreign markets.

One of the pivotal insights from the study indicates that firms heavily invested in R&D and marketing typically experience stronger positive market responses upon initiating foreign acquisitions. This underscores the value investors place on intangible assets as drivers of future growth and competitive differentiation. Nevertheless, this advantage is not guaranteed. Without effective oversight from corporate boards, the benefits of technology and brand-related assets risk being substantially diluted in the context of cross-border transactions, where informational asymmetries, cultural barriers, and governance complexities abound.

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Central to bridging this gap, according to the study, is a corporate board structure that embodies specific dimensions of effectiveness. The researchers categorize board effectiveness into four essential traits: independence, expertise, bandwidth, and motivation. Independence refers to having a larger contingent of non-executive directors and a clear separation of CEO and chair roles, which collectively enhance impartial oversight. Expertise emphasizes the presence of directors with international managerial experience who can navigate the nuances of cross-border deals. Bandwidth speaks to ensuring directors are not overstretched by obligations on multiple boards, preserving their capacity to provide meaningful governance. Motivation entails directors holding significant equity stakes, aligning their incentives with shareholder value creation.

The interplay between these governance qualities and intangible assets creates a synergy that amplifies shareholder returns from international acquisitions. For instance, boards rich in international expertise are better equipped to understand complex foreign regulatory environments and cultural idiosyncrasies, enabling strategic decisions that maximize the retention and transferability of intangible value. Similarly, motivated directors with skin in the game champion long-term value creation, resisting short-term pressures that could undermine the effective mobilization of R&D and marketing capabilities abroad.

This research breaks important new ground by quantifying how these board attributes materially influence firm valuation in the international arena. The data shows that companies with highly effective boards see significantly greater abnormal stock returns following acquisition announcements than peers with less effective governance, especially when technology-intensive strategies are pursued. This provides compelling evidence that board composition is not a mere compliance formality but a strategic lever critical to internationalization success.

The implications of these findings ripple beyond academic theory into the practical challenges of multinational enterprise management. Firms seeking to leverage intangible assets globally must reconsider traditional assumptions that investment in innovation and brand-building alone guarantees international competitive advantage. Instead, they must embed governance models that ensure boards are structurally and cognitively equipped to steward complex cross-border value creation processes.

This emphasis on governance is particularly pertinent in the contemporary economy, where intangible investments are rapidly escalating, driven by cutting-edge fields like artificial intelligence, biotechnology, and digital platforms. The strategic deployment of intangibles in these sectors requires nimble boards that can assess novel technologies, evaluate cross-cultural integration risks, and endorse disclosure policies that balance transparency with competitive secrecy. As the study highlights, such governance capabilities become vital in translating intangible investments into sustained global leadership.

Martin and Han’s study also suggests a reevaluation of board appointment and training practices. Enhancing board effectiveness may mean attracting directors with diverse international experience, incentivizing meaningful equity participation, and managing board workloads to secure governance bandwidth. These measures collectively build a more robust supervisory framework attuned to the complexities of intangible asset internationalization.

Furthermore, the research invites policymakers and institutional investors to recognize board effectiveness as a key dimension in evaluating firm readiness for international expansion. Given the measurable impact on shareholder value, governance reforms and stewardship initiatives could be calibrated to promote effective board characteristics, ultimately fostering a more resilient and innovative global corporate sector.

In summary, this pioneering study reframes the narrative around intangible assets and international acquisitions. It bridges the gap between knowledge creation and value realization by identifying board effectiveness as a critical conduit through which intangible investments manifest as firm performance. For executives charting global growth trajectories, the message is clear: intangible assets alone are insufficient without strategic governance that empowers boards to guide, oversee, and motivate the complex journey of internationalization.

The original research article, titled Board effectiveness and internalization benefits: Theory and evidence from value creation in cross-border acquisitions, is slated for publication on May 9, 2025, in the Global Strategy Journal. For those interested in delving deeper into methodology and detailed findings, the article is available through academic access links provided by Wiley.

As global business continues to pivot on innovation and knowledge, this study’s insights offer a timely blueprint for unlocking the full potential of intangibles. Companies that embrace governance as a strategic asset stand poised not only to survive but to thrive in the escalating global competition for technological and brand leadership.


Subject of Research: Board effectiveness in corporate governance and its role in enhancing value creation from intangible assets during cross-border acquisitions.

Article Title: Board effectiveness and internalization benefits: Theory and evidence from value creation in cross-border acquisitions

News Publication Date: 9-May-2025

Web References:

  • Study link: https://sms.onlinelibrary.wiley.com/doi/10.1002/gsj.1524
  • Global Strategy Journal: https://onlinelibrary.wiley.com/journal/20425805

References: DOI 10.1002/gsj.1524

Keywords: Corporations, Corporate Governance, Intangible Assets, Cross-Border Acquisitions, Board Effectiveness, Internationalization, R&D Intensity, Advertising Intensity, Market Returns

Tags: advertising expenditure influenceboard structure and effectivenesscompetitive advantages through intangiblescorporate governance best practicescorporate strategy in international marketscross-border acquisitionsempirical research in business strategyglobal economy trendsintangible asset valuationmarket reactions to acquisitionsR&D intensity impactstrong board governance
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