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Intangible Assets and their Contribution to Labour Productivity Growth in Ontario

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  • Tatiana Muntean

Abstract

Recent empirical studies confirm that the contribution of intangible capital investment to labour productivity growth is comparable to that of tangible capital investment for a wide range of countries, including the United States, the United Kingdom, Canada, Germany, and France. Following Corrado et al. (2005) and Baldwin et al. (2012), this article assesses business sector investment in intangible assets and analyses the contribution of intangible capital to business sector labour productivity growth at the provincial level in Canada, in particular in Ontario. The results of this growth accounting exercise demonstrate that intangible capital contributes significantly to labour productivity growth in Ontario. In 1998-2008 intangible capital contributed on average 26.2 per cent to labour productivity growth while tangible capital contributed 17.9 per cent and labour composition contributed 8.7 per cent. Innovative property contributed the most among all categories of intangible capital, followed by economic competencies and computerized information.

Suggested Citation

  • Tatiana Muntean, 2014. "Intangible Assets and their Contribution to Labour Productivity Growth in Ontario," International Productivity Monitor, Centre for the Study of Living Standards, vol. 27, pages 22-39, Fall.
    • Handle: RePEc:sls:ipmsls:v:27:y:2014:6
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    File URL: http://www.csls.ca/ipm/27/27-tm.pdf
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    References listed on IDEAS

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    1. Carol Corrado & Charles Hulten & Daniel Sichel, 2009. "Intangible Capital And U.S. Economic Growth," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(3), pages 661-685, September.
    2. Baldwin, John R. Gu, Wulong Lafrance, Amélie Macdonald, Ryan, 2009. "Investment in Intangible Assets in Canada: R&D, Innovation, Brand, and Mining, Oil and Gas Exploration Expenditures," The Canadian Productivity Review 2009026e, Statistics Canada, Economic Analysis Division.
    3. Nazim Belhocine, 2008. "Treating Intangible Inputs As Investment Goods: The Impact On Canadian Gdp," Working Paper 1215, Economics Department, Queen's University.
    4. Maria Elena Bontempi & Jacques Mairesse, 2008. "Intangible Capital and Productivity: An Exploration on a Panel of Italian Manufacturing Firms," NBER Working Papers 14108, National Bureau of Economic Research, Inc.
    5. Baldwin, John R. & Gu, Wulong & Macdonald, Ryan, 2012. "Intangible Capital and Productivity Growth in Canada," The Canadian Productivity Review 2012029e, Statistics Canada, Economic Analysis Division.
    6. van Ark, Bart & Hao, Janet X. & Corrado, Carol & Hulten, Charles, 2009. "Measuring intangible capital and its contribution to economic growth in Europe," EIB Papers 3/2009, European Investment Bank, Economics Department.
    7. Baldwin, John R. Gu, Wulong, 2007. "Investment and Long-term Productivity Growth in the Canadian Business Sector, 1961 to 2002," The Canadian Productivity Review 2007006e, Statistics Canada, Economic Analysis Division.
    8. Paola Giuri & Salvatore Torrisi & Natalia Zinovyeva, 2005. "ICT, Skills and Organisational Change: Evidence from a Panel of Italian Manufacturing Firms," LEM Papers Series 2005/11, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
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    Cited by:

    1. Mercedes Gumbau-Albert & Joaquín Maudos, 2022. "The importance of intangible assets in regional economic growth: a growth accounting approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 69(2), pages 361-390, October.
    2. Don Drummond & Evan Capeluck & Matthew Calver, 2015. "The Key Challenge for Canadian Public Policy: Generating Inclusive and Sustainable Economic Growth," CSLS Research Reports 2015-11, Centre for the Study of Living Standards.
    3. Carolina Hintzmann & Josep Lladós-Masllorens & Raul Ramos, 2021. "Intangible Assets and Labor Productivity Growth," Economies, MDPI, vol. 9(2), pages 1-21, May.

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    More about this item

    Keywords

    Intangible Assets; Intangible Capital; Labour Productivity; Productivity Growth; Ontario;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • N92 - Economic History - - Regional and Urban History - - - U.S.; Canada: 1913-

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