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Impact of Intangible Capital on Productivity and Growth: Lessons from the Indian Information Technology Software Industry

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  • SUPRIYO DE
  • DILIP DUTTA

Abstract

This paper examines the impact of intangible capital, including human capital and organisational capabilities on productivity, using India as an illustrative example. The research breaks new ground in creating measures of intangible capital at a micro level. Measures of tangible and intangible capital are used to estimate a ‘new economy’ production function with panel data. Generalised method of moments techniques are used to account for unobserved firm heterogeneity and endogenous explanatory variables. The results indicate that intangible assets have a major impact on software sector output. This has important implications for public policy and corporate strategy towards the information technology industry, including for Australia.

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  • Supriyo De & Dilip Dutta, 2007. "Impact of Intangible Capital on Productivity and Growth: Lessons from the Indian Information Technology Software Industry," The Economic Record, The Economic Society of Australia, vol. 83(s1), pages 73-86, September.
    • Handle: RePEc:bla:ecorec:v:83:y:2007:i:s1:p:s73-s86
    DOI: 10.1111/j.1475-4932.2007.00406.x
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    2. Klaus Friesenbichler & Agnes Kügler & Julia Schieber-Knöbl, 2023. "Intangible Capital as a Production Factor. Firm-level Evidence from Austrian Microdata," WIFO Working Papers 660, WIFO.
    3. Ian Rowlands, 2011. "Ancillary impacts of energy-related climate change mitigation options in Africa’s least developed countries," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 16(7), pages 749-773, October.
    4. HOSONO Kaoru & MIYAKAWA Daisuke & TAKIZAWA Miho & YAMANOUCHI Kenta, 2016. "Complementarity and Substitutability between Tangible and Intangible Capital: Evidence from Japanese firm-level data," Discussion papers 16024, Research Institute of Economy, Trade and Industry (RIETI).
    5. Dr. Naqeeb Ur Rehman, 2015. "Business and Management Factors Relating to Firm Innovation Performance," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 6(1), pages 78-90, January.
    6. Zhang, Cheng & Zhou, Bo & Tian, Xuan, 2022. "Political connections and green innovation: The role of a corporate entrepreneurship strategy in state-owned enterprises," Journal of Business Research, Elsevier, vol. 146(C), pages 375-384.
    7. Guo, Kaiming & Hang, Jing & Yan, Se, 2021. "Servicification of investment and structural transformation: The case of China," China Economic Review, Elsevier, vol. 67(C).
    8. Qiuqin He & Minglin Wang & Clara Martínez-Fuentes, 2020. "Impact of corporate entrepreneurial strategy on firm performance in China," International Entrepreneurship and Management Journal, Springer, vol. 16(4), pages 1427-1444, December.
    9. Canarella, Giorgio & Miller, Stephen M., 2018. "The determinants of growth in the U.S. information and communication technology (ICT) industry: A firm-level analysis," Economic Modelling, Elsevier, vol. 70(C), pages 259-271.
    10. Bishwanath Goldar & Yashobanta Parida, 2017. "Intangible Capital and Firm Productivity," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 18(2), pages 246-275, September.
    11. De, Supriyo, 2014. "Intangible capital and growth in the ‘new economy’: Implications of a multi-sector endogenous growth model," Structural Change and Economic Dynamics, Elsevier, vol. 28(C), pages 25-42.
    12. Pradeep Kanta Ray & Sangeeta Ray & Vikas Kumar, 2017. "Internationalization of latecomer firms from emerging economies—The role of resultant and autonomous learning," Asia Pacific Journal of Management, Springer, vol. 34(4), pages 851-873, December.
    13. Roth, Felix, 2019. "Intangible Capital and Labour Productivity Growth: A Review of the Literature," Hamburg Discussion Papers in International Economics 4, University of Hamburg, Department of Economics.
    14. Qiuqin He & Minglin Wang & Clara Martínez-Fuentes, 0. "Impact of corporate entrepreneurial strategy on firm performance in China," International Entrepreneurship and Management Journal, Springer, vol. 0, pages 1-18.
    15. Ray, Sangeeta & Ray, Pradeep Kanta, 2021. "Innovation strategy of latecomer firms under tight appropriability regimes: The Indian pharmaceuticals industry," Journal of International Management, Elsevier, vol. 27(1).

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