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Treating Intangible Inputs as Investment Goods: The Impact on Canadian GDP

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  • Nazim Belhocine

Abstract

This paper constructs a data set to document firms' expenditures on an identifiable list of intangible items and examines the implications of treating intangible spending as an acquisition of final (investment) goods on GDP growth for Canada. It finds that investment in intangible capital by 2002 is almost as large as the investment in physical capital. This result is in line with similar findings for the U.S. and the U.K. Furthermore, the growth in GDP and labor productivity may be underestimated by as much as 0.1 percentage point per year during this same period.

Suggested Citation

  • Nazim Belhocine, 2009. "Treating Intangible Inputs as Investment Goods: The Impact on Canadian GDP," IMF Working Papers 2009/240, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2009/240
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    References listed on IDEAS

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    1. Mauro Giorgio Marrano & Jonathan Haskel, 2006. "How Much Does the UK Invest in Intangible Assets?," Working Papers 578, Queen Mary University of London, School of Economics and Finance.
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    3. 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.
    4. Zvi Griliches, 1998. "Productivity, R&D, and the Data Constraint," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 347-374, National Bureau of Economic Research, Inc.
    5. Kyoji Fukao & Tsutomu Miyagawa & Kentaro Mukai & Yukio Shinoda & Konomi Tonogi, 2009. "Intangible Investment In Japan: Measurement And Contribution To Economic Growth," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(3), pages 717-736, September.
    6. Nazim Belhocine, 2008. "The Embodiment Of Intangible Investment Goods: A Q-theory Approach," Working Paper 1217, Economics Department, Queen's University.
    7. Carlos J. Serrano, 2010. "The dynamics of the transfer and renewal of patents," RAND Journal of Economics, RAND Corporation, vol. 41(4), pages 686-708, December.
    8. Carol Corrado & John Haltiwanger & Daniel Sichel, 2005. "Measuring Capital in the New Economy," NBER Books, National Bureau of Economic Research, Inc, number corr05-1, March.
    9. Baldwin, John R. Beckstead, Desmond Gellatly, Guy, 2005. "Canada's Investments in Science and Innovation: Is the Existing Concept of Research and Development Sufficient?," Economic Analysis (EA) Research Paper Series 2005032e, Statistics Canada, Analytical Studies Branch.
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    Citations

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    Cited by:

    1. Nazim Belhocine, 2008. "The Stock Of Intangible Capital In Canada: Evidence From The Aggregate Value Of Securities," Working Paper 1216, Economics Department, Queen's University.
    2. Nazim Belhocine, 2008. "The Embodiment Of Intangible Investment Goods: A Q-theory Approach," Working Paper 1217, Economics Department, Queen's University.
    3. Dutz, Mark A. & Kannebley, Sergio Jr. & Scarpelli, Maira & Sharma, Siddharth, 2012. "Measuring intangible assets in an emerging market economy: an application to Brazil," Policy Research Working Paper Series 6142, The World Bank.
    4. Giglio, Stefano & Severo, Tiago, 2012. "Intangible capital, relative asset shortages and bubbles," Journal of Monetary Economics, Elsevier, vol. 59(3), pages 303-317.
    5. Li, Qing & Vo, Long Hai & Wu, Yanrui, 2019. "Intangible capital distribution in China," Economic Systems, Elsevier, vol. 43(2), pages 1-1.
    6. Carolina Hintzmann & Josep Lladós-Masllorens & Raul Ramos, 2021. "Intangible Assets and Labor Productivity Growth," Economies, MDPI, vol. 9(2), pages 1-21, May.
    7. 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.
    8. MORIKAWA Masayuki, 2012. "Financial Constraints in Intangible Investments: Evidence from Japanese firms," Discussion papers 12045, Research Institute of Economy, Trade and Industry (RIETI).
    9. repec:dau:papers:123456789/5002 is not listed on IDEAS
    10. Guo, Kaiming & Hang, Jing & Yan, Se, 2021. "Servicification of investment and structural transformation: The case of China," China Economic Review, Elsevier, vol. 67(C).
    11. International Monetary Fund, 2016. "Ireland: Selected Issues," IMF Staff Country Reports 2016/257, International Monetary Fund.
    12. Li, Qing & Wu, Yanrui, 2018. "Intangible capital in Chinese regional economies: Measurement and analysis," China Economic Review, Elsevier, vol. 51(C), pages 323-341.

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    More about this item

    Keywords

    WP; intangible investment; national income; tow investment goods; data processing establishment; expenditure data;
    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
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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