Goodwill and Its Effect on Share Price of Manufacturing and Nonmanufacturing Companies

• Main Author: Martin Kedron
• Format: Article
• Language: English
• Published: Mendel University Press 2020-01-01
• Series: Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis
• Subjects: primary goodwill; secondary goodwill; intangible assets; sectors of intangible assets
• Online Access: https://acta.mendelu.cz/asap/actaun_2020068020373/

This research examines how goodwill is relevant to share price on a sample of European companies with goodwill. The dataset includes 7,253 European companies broken down by sector according to the NACE classification in the period 2009–2017. Linear regression analysis was used to identify the effect of goodwill on share price. It was found out that goodwill has a positive effect on share price in manufacturing companies. These results suggest that the information contained in goodwill should be more identified to provide users of reporting with more information.