Goodwill and its effect on share price of manufacturing and nonmanufacturing companies

Abstract

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.