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Do Intangibles Contribute to Productivity Growth in East Asian Countries? Evidence from Japan and Korea

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  • Hyunbae CHUN
  • MIYAGAWA Tsutomu
  • Hak Kil PYO
  • TONOGI Konomi

Abstract

Using the Japan Industrial Productivity (JIP) and the Korea Industrial Productivity (KIP) databases and other primary statistics in Japan and Korea, we estimate intangible investment in Japan and Korea at the industry-level. Comparing our estimates from two-country data, we find that the growth in intangible investment in Korea has exceeded that in Japan in the past 30 years. Intangible investment/gross value added (GVA) ratios in the machinery industries in Japan are higher than in Korea, because Japanese machinery industries are research and development (R&D) intensive. On the other hand, ratios in some service industries in Korea are higher than in Japan, because Korean service industries are information and communications technology (ICT)-intensive. When we conduct growth accounting analysis with intangibles, we find that the contribution of intangible investment to economic growth after 1995 in Japan decreased significantly. In addition, the contribution of intangibles to productivity growth in Japan after 1995 is lower than not only Korea but also the European Union (EU) countries and the United States. The lack of synergy effects between ICT and intangibles in Japan may be the cause of low productivity growth in the 2000s.

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  • Hyunbae CHUN & MIYAGAWA Tsutomu & Hak Kil PYO & TONOGI Konomi, 2015. "Do Intangibles Contribute to Productivity Growth in East Asian Countries? Evidence from Japan and Korea," Discussion papers 15055, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:15055
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    Cited by:

    1. Li, Qing & Wu, Yanrui, 2020. "Intangible capital, ICT and sector growth in China," Telecommunications Policy, Elsevier, vol. 44(1).
    2. Sangjun Jeong, 2017. "Biased Technical Change and Economic Growth: The Case of Korea, 1970–2013," Research in Political Economy, in: Return of Marxian Macro-Dynamics in East Asia, volume 32, pages 81-103, Emerald Group Publishing Limited.
    3. Tsutomu Miyagawa & Miho Takizawa & Konomi Tonogi, 2017. "Can Intangible Investments Ease Declining Rates of Return on Capital in Japan?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 33, pages 114-127, Fall.
    4. MIYAGAWA Tsutomu & TAKIZAWA Miho & TONOGI Konomi, 2016. "Declining Rate of Return on Capital and the Role of Intangibles in Japan," Discussion papers 16051, Research Institute of Economy, Trade and Industry (RIETI).
    5. Cecilia Jona-Lasinio & Valentina Meliciana, 2019. "Global Value Chains and Productivity Growth: Does Intangible Capital Matter?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 36, pages 53-78, Spring.

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