Determining the factors affecting the value of companies operating in the software industry: A practical approach on software manufacturers traded on NASDAQ

Technological developments in the information age we live in have created an information society both socially and institutionally. Computers, which have the largest share in the formation of the information age, and the internet, which entered our lives with them, have been effective in the formation of a new economy. The most important difference of this new economy from the traditional economy is that it includes knowledge-based industries. The entry of knowledge-based industries into our lives has created new questions in the field of finance and paved the way for new research to find answers to these questions. Subjects such as how to determine firm value in knowledge-based industries and what factors affect firm value have become a new field of research. The valuation issue has become important for companies operating in knowledge-based industries due to the weight of intangible assets, the fact that they have established their foundations on the internet, and network effects are common. Valuation with traditional methods is insufficient for companies operating in these industries. The fact that it does not include many factors that are thought to affect the firm value in its calculations requires a review of these methods. In this study, it is aimed to determine the factors that are effective in the valuation of software companies in knowledge-based industries, to examine the relations of these factors with each other, to determine their contribution to firm value and to make a recommendation for valuation analysis to be made in companies where intangible assets are predominant. For this purpose, a study was conducted involving 97 companies operating in the software industry and traded on NASDAQ. In order to reach the necessary data for the application, the content analysis method, one of the qualitative research methods, was used and a question set was prepared. The answers to this question set were obtained from the official websites of the sample companies, their annual reports, financial reports and sustainability reports. The obtained data were analyzed using the SPSS package program. The analyzes started by examining the relationships between the variables that constitute the conceptual framework of the research. Then, multiple linear regression analysis was used to determine the factors affecting firm value. In this context, the FD/EBITDA multiplier of the software companies included in the research sample was considered as the dependent variable. According to the results of the analysis, it has been determined that the value of software companies is affected by the independent variables of employee growth, number of engineers, technology talent, intangible assets, personnel development quality, growth strategy, risk and management, donations and social responsibility, sales growth, net profit growth. These results have contributed to the literature on the valuation of knowledge-based industries. Keywords: New economy, knowledge based firms, software industry, intangible assets, intellectual capital, firm value.