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Intangible Investment and Firm Performance

Author

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  • Nathan Chappell

    () (Motu Economic and Public Policy Research)

  • Adam Jaffe

    () (Queensland University of Technology)

Abstract

We combine survey and administrative data for about 13,000 New Zealand firms from 2005 to 2013 to study intangible investment and firm performance. We find that firm size and moderate competition is associated with higher intangible investment, while firm age is associated with lower intangible investment. Examining firm performance, we find that higher investment is associated with higher labour and capital input, higher revenue, and higher firm-reported employee and customer satisfaction, but not with higher productivity or profitability. The evidence suggests that intangible investment is associated with growth and ‘soft’ performance objectives, but not with productivity or profitability.

Suggested Citation

  • Nathan Chappell & Adam Jaffe, 2018. "Intangible Investment and Firm Performance," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 52(4), pages 509-559, June.
  • Handle: RePEc:kap:revind:v:52:y:2018:i:4:d:10.1007_s11151-018-9629-9
    DOI: 10.1007/s11151-018-9629-9
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    Citations

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    Cited by:

    1. Ryota Nakatani, 2019. "Firm performance and corporate finance in New Zealand," Applied Economics Letters, Taylor & Francis Journals, vol. 26(13), pages 1118-1124, July.
    2. Marie Le Mouel & Alexander Schiersch, 2020. "Knowledge-Based Capital and Productivity Divergence," Discussion Papers of DIW Berlin 1868, DIW Berlin, German Institute for Economic Research.
    3. Roth, Felix, 2019. "Intangible Capital and Labour Productivity Growth: A Review of the Literature," Hamburg Discussion Papers in International Economics 4, University of Hamburg, Chair of International Economics.
    4. Shenglang Yang & Yixiao Zhou & Ligang Song, 2018. "Determinants of Intangible Investment and Its Impacts on Firms' Productivity: Evidence from Chinese Private Manufacturing Firms," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 26(6), pages 1-26, November.
    5. Mike Onder Kaymaz & Ilker Yilmaz & Ozgur Kaymaz, 2019. "The Impact Of Intangible Factors On Profitability: Evidence From Corporations Traded At Muscat Securities Market In Oman," Copernican Journal of Finance & Accounting, Uniwersytet Mikolaja Kopernika, vol. 8(2), pages 25-47.
    6. Hyuk Chung, 2021. "Adoption and Development of the Fourth Industrial Revolution Technology: Features and Determinants," Sustainability, MDPI, Open Access Journal, vol. 13(2), pages 1-16, January.

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    More about this item

    Keywords

    Firm performance; Industrial policy; Intangible investment; Productivity;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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