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The impact of investment in knowledge-based capital on productivity: firm-level evidence from Ireland

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  • Siedschlag, Iulia
  • Di Ubaldo, Mattia

Abstract

This paper examines the impact of investment in knowledge-based capital on firm productivity. The analysis is based on a dynamic econometric model estimated with micro-data from Ireland over the period 2006-2012. We use broad measures of investment in knowledge-based capital which include expenditures on R&D, and on non-R&D intangible assets such as computer software, copyrights, patents and licences, royalties and organisational capital. The results indicate that on average, over and above other factors, an increase in investment in knowledge-based capital of 10 per cent increases firm productivity by 2 per cent. The research results indicate that productivity gains linked to investment in KBC are larger for Irish-owned firms in comparison to foreign-owned firms. Further, the estimates indicate that firms’ productivity is more responsive to investment in R&D than to investment in non-R&D intangible assets.

Suggested Citation

  • Siedschlag, Iulia & Di Ubaldo, Mattia, 2017. "The impact of investment in knowledge-based capital on productivity: firm-level evidence from Ireland," Papers WP556, Economic and Social Research Institute (ESRI).
    • Handle: RePEc:esr:wpaper:wp556
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    Cited by:

    1. David B. Audretsch & Marian Hafenstein & Alexander S. Kritikos & Alexander Schiersch, 2018. "Firm Size and Innovation in the Service Sector," Discussion Papers of DIW Berlin 1774, DIW Berlin, German Institute for Economic Research.
    2. Siedschlag, Iulia & Lawless, Martina & Di Ubaldo, Mattia, 2017. "Investment in knowledge-based capital and its contribution to productivity growth: a review of international and Irish evidence," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT336, June.

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