Reis, Cristina Fróes de BorjaCristina Fróes de BorjaReisBarroso de Souza, AndréAndréBarroso de SouzaAraújo, Eliane Cristina deEliane Cristina deAraújoBlind, KnutKnutBlind2022-03-062022-03-062021https://publica.fraunhofer.de/handle/publica/26567810.1108/JMTM-08-2019-0306Purpose: This paper aims to investigate if the world top manufacturing corporations' cost structures are moving from tangible to intangible activities and their impact on profitability. Design/methodology/approach: The theoretical approach is interdisciplinary, combining global value chains, international manufacturing networks, cost management literatures. The empirical approach has a sample out of financial statements' data from 220 multinational corporations between 2006 and 2017, grouping them by technological intensity. It is created the ""COGS-share"" indicator - the ratio between the costs of goods sold and overall costs and expenses - as a proxy for the firms' expenses of tangible and intangible value chain activities. It is tested as an explanatory variable for the companies' profits through dynamic panel data econometric models. Findings: The results show that the cost structure still is very concentrated in tangibles. Though costs of both tangible and intangible activities negatively impact profits, they affect value generation differently: the higher the share of intangible in comparison to tangible activities in overall cost and expenses, the greater the profits in most manufacturing groups, regardless of their technological intensity. Research limitations/implications: The empirical analysis simplifies the composition of value chains per activity because financial statements data are aggregates, preventing detailed analysis by markets, business units or products. Stocks' levels are assumed to be at the desired level during the time series. The dataset does not allow value curves to be drawn because direct wages' data and more precise information on cost (especially deferred assets and wages) are missing. Practical implications: The presented approach, particularly the COGS-share indicator, contribute to assess value generation from activities for improving corporate strategies and public policies on operations and cost management of global value chains. Social implications: Supporting upgrading decisions that impact value production, allocation and distribution between workers, firms and countries. Originality/value: Interdisciplinary theoretical and empirical assessment of the manufacturing companies' cost structures and profits based on financial statements data for the better understanding of value generation from tangible and intangible activities.enmanufacturingmultinational corporationfinancial statementscost structureGlobal value chains303600journal article