Unveiling The Nexus Between Intangibles and High Growth - An Analysis of Swedish Gazelle Companies

Abstract

This study investigates the determinants of intangible asset capitalization behavior among Swedish gazelle firms. Specifically, it examines firm-level characteristics that are associated with the decision to capitalize intangible assets on the balance sheet. Drawing on a sample of 5842 private limited liability Gazelle firms in Sweden from 2005 to 2025, the analysis focuses on characteristics such as profitability, leverage, firm age, and the persistence of high growth. We provide direct evidence that Gazelles exhibiting repeated high growth are significantly more likely to capitalize intangible assets. Our subsample of 742 firms also suggests that capitalization of different types of intangible assets are impacted by different types of firm characteristics. By offering empirical evidence on the accounting behavior of high-growth firms, we offer important insights for the literature on intangible assets and enhance the understanding of how internal firm characteristics influence the probability of intangible asset capitalization. It contributes to the overall ongoing discussion regarding the importance of intangible assets.