Intangible Intensity

We develop a text-based measure of intangible investment intensity derived from firms' 10-K filings, and offer a general methodology for semantic theme scoring (STS).Our approach further classifies disclosure text into knowledge, customer, and organization capital.Firms with high intangible intensity are smaller, younger, and invest heavily in R&D and human capital.The three subcomponents map cleanly to distinct economic firm types: knowledge-intensive firms are R&Ddriven with high valuations and skilled labor; customer-intensive firms are mature, profitable, and commercially oriented; and organization-intensive firms are large, asset-heavy incumbents.Managerial expenditure descriptions thus provide informative signals about intangible investment, complementing financial statements in capturing corporate capital stocks.