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Investments in Intangible Assets and Australia’s Productivity Growth — Sectoral Estimates

Author

Listed:
  • Barnes, Paula

    (Productivity Commission)

Abstract

This Productivity Commission staff working paper (by Paula Barnes) examines sectoral investment in intangible assets in Australia following on from a previous paper on an examination of intangibles assets in the market sector as a whole. It highlights some significant issues relating to the measurement of intangibles and their contribution to productivity, finding that estimates of intangibles at the aggregate level mask considerable sectoral differences. In recent years increased attention has been given to the contribution to economic growth of intangible assets such as knowledge, firm-specific skills and better ways of doing business. But most intangibles are treated as current expenses in official statistics, rather than as assets — despite the fact that they provide services in more than one period. This makes it difficult to examine their role in the economy. It leads to an understatement of investment in the economy and may also affect measures of productivity growth. This paper addresses two questions: does the importance of intangibles as part of total investment vary across sectors?; and does the exclusion of many intangibles from investment measurement affect the measures of sectoral economic growth and productivity? The views expressed in this paper are those of the staff involved and do not necessarily reflect those of the Productivity Commission.

Suggested Citation

  • Barnes, Paula, 2010. "Investments in Intangible Assets and Australia’s Productivity Growth — Sectoral Estimates," Staff Working Papers 103, Productivity Commission, Government of Australia.
  • Handle: RePEc:ris:prodsw:2010_003
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    File URL: http://www.pc.gov.au/__data/assets/pdf_file/0007/99907/intangible-investment-sectoral-estimates.pdf
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    File URL: http://www.pc.gov.au/research/staffworkingpaper/intangible-investment-sectoral-estimates
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    Citations

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    Cited by:

    1. 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.
    2. Hyunbae Chun & M. Ishaq Nadiri, 2016. "Intangible Investment and Changing Sources of Growth in Korea," The Japanese Economic Review, Japanese Economic Association, vol. 67(1), pages 50-76, March.
    3. Amani Elnasri & Kevin J. Fox, 2017. "The contribution of research and innovation to productivity," Journal of Productivity Analysis, Springer, vol. 47(3), pages 291-308, June.
    4. Haskel, J & Corrado, C & Jona-Lasinio, C & Iommi, M, 2013. "Innovation and intangible investment in Europe, Japan and the US," Working Papers 11139, Imperial College, London, Imperial College Business School.
    5. Hedia Fourati & Habib Affes, 2013. "Intellectual Capital Investment, Stakeholders' Value, Firm Market Value and Financial Performance: The Case of Tunisia Stock Exchange," Journal of Information & Knowledge Management (JIKM), World Scientific Publishing Co. Pte. Ltd., vol. 12(02), pages 1-12.
    6. Tsutomu Miyagawa & Shoichi Hisa, 2013. "Measurement of Intangible Investment by Industry and Economic Growth in Japan," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 9(2), pages 405-432, March.
    7. Yu Sheng & Tom Jackson & Shiji Zhao & Dandan Zhang, 2017. "Measuring Output, Input and Total Factor Productivity in Australian Agriculture: An Industry-Level Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63, pages 169-193, February.

    More about this item

    Keywords

    intangible assets; sectoral investment; productivity; assets; human capital; R&D; research and development; brand equity;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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