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Intangible capital and productivity: Firm-level evidence from German manufacturing

Author

Listed:
  • Wolfhard Kaus
  • Viktor Slavtchev
  • Markus Zimmermann

Abstract

This article analyses the importance of intangible capital for firm productivity using comprehensive official firm-level data from German manufacturing. Both aggregate intangible investment and the share of investing firms increase over time. However, the distribution of intangible investment is heavily right-skewed, with many firms investing nothing or little and few investing a lot. This holds both for manufacturing overall and within narrowly defined industries. The group of top investors is highly persistent from year to year, and persistence increases over time. Production function estimations reveal a positive output elasticity of intangible capital which is small on average but increases substantially with firm-level intangible capital intensity. There are also effect heterogeneities by firm size and enterprise group membership, especially among high-intangible-intensive firms. Finally, considering intangibles as production factors reduces the measured dispersion of Total Factor Productivity (TFP), mainly by tightening the upper part of the TFP distribution.

Suggested Citation

  • Wolfhard Kaus & Viktor Slavtchev & Markus Zimmermann, 2024. "Intangible capital and productivity: Firm-level evidence from German manufacturing," Oxford Economic Papers, Oxford University Press, vol. 76(4), pages 970-996.
    • Handle: RePEc:oup:oxecpp:v:76:y:2024:i:4:p:970-996.
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    File URL: http://hdl.handle.net/10.1093/oep/gpad051
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    Cited by:

    1. Matej Bajgar & Chiara Criscuolo & Jonathan Timmis, 2021. "Intangibles and industry concentration: Supersize me," OECD Science, Technology and Industry Working Papers 2021/12, OECD Publishing.
    2. Axenbeck, Janna & Niebel, Thomas, 2021. "Climate protection potentials of digitalized production processes: Microeconometric evidence?," ZEW Discussion Papers 21-105, ZEW - Leibniz Centre for European Economic Research.
    3. Matej Bajgar & Chiara Criscuolo & Jonathan Timmis, 2026. "Intangibles and Industry Concentration: A Cross‐Country Analysis," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 88(2), pages 258-274, April.
    4. Carolina Hintzmann & Josep Lladós-Masllorens & Raul Ramos, 2021. "Intangible Assets and Labor Productivity Growth," Economies, MDPI, vol. 9(2), pages 1-21, May.
    5. Klaus S. Friesenbichler & Agnes Kügler, 2026. "Short and medium-term effects of intangible capital on firm growth: firm-level evidence from austrian microdata," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 53(1), pages 113-148, February.
    6. Roth, Felix & Sen, Ali & Rammer, Christian, 2021. "Intangible Capital and Firm-Level Productivity – Evidence from Germany," Hamburg Discussion Papers in International Economics 9, University of Hamburg, Department of Economics.
    7. Caggese, Andrea & Pérez-Orive, Ander, 2022. "How stimulative are low real interest rates for intangible capital?," European Economic Review, Elsevier, vol. 142(C).
    8. Roth, Felix & Rammer, Christian, 2025. "Intangible assets and productivity at the firm level: R&D versus non-R&D intangibles," ZEW Discussion Papers 25-062, ZEW - Leibniz Centre for European Economic Research.
    9. Wu, Yan & Niu, Peiyuan & Wu, Yunqiao, 2025. "Does the digital sector affiliation matter for the productivity of multinational firms?," Economic Modelling, Elsevier, vol. 144(C).
    10. 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.
    11. gert Bijnens & Joep Konings & Aaron Putseys, 2025. "Unveiling the J-curve: How Intangibles Drive Productivity Mismeasurement," Working Papers of VIVES - Research Centre for Regional Economics 779815, KU Leuven, Faculty of Economics and Business (FEB), VIVES - Research Centre for Regional Economics.
    12. Gillman, Max & Csabafi, Tamas Z. & Benk, Szilard & Matyas, Laszlo & Smith, Mitchell P. & Harris, Mark N., 2026. "Revisiting neoclassical growth theory: A primary role for inflation and capacity utilization," Economic Modelling, Elsevier, vol. 154(C).
    13. Jiang, Haiwei & Li, Tao & Pan, Shiyuan & Zhang, Chen, 2025. "How does basic research affect innovation? Evidence from China," Journal of Asian Economics, Elsevier, vol. 101(C).
    14. Grégory Claeys & Maria Demertzis, 2021. "The productivity paradox- policy lessons from MICROPROD," Bruegel Policy Contributions 40536, Bruegel.
    15. Son, Sung Hyun & Kim, Young-Han, 2025. "Productivity spillover effects of participation in global value chains and FDI inflows," Economic Modelling, Elsevier, vol. 153(C).
    16. Klaus Friesenbichler & Agnes Kügler & Julia Schieber-Knöbl, 2022. "Unternehmensproduktivität über Sektoren in Österreich. Erste Evidenz von Mikrodaten," WIFO Research Briefs 21, WIFO.
    17. Zhou, Kuo & Qu, Zhi & Guo, Yiman & Hu, Runnian, 2025. "Does a firm's intelligent technological transformation matter for its access to financial resources?," Economic Modelling, Elsevier, vol. 149(C).
    18. Xie, Jie & Tian, Jiayu & Hu, Yong & Wang, Quan & Dai, Zhaoqiong, 2025. "Imported intermediate goods, intellectual property protection, and innovation in Chinese manufacturing firms," Economic Modelling, Elsevier, vol. 144(C).
    19. Zhao, Yiming & Li, Haitong & Miao, Zicong & Li, Keyang, 2025. "Digital M&As, knowledge distance, and labor productivity: Technical and organizational perspectives," Economic Modelling, Elsevier, vol. 147(C).
    20. Chetia, Pompi & Behera, Smruti Ranjan & Mishra, Tapas & Parhi, Mamta, 2025. "FDI spillovers, innovation and the role of industrial clusters: Evidence from innovative Indian manufacturing firms," Economic Modelling, Elsevier, vol. 152(C).
    21. Luca Menicacci, 2025. "Real effects of investment tax incentives: evidence from Italian private firms," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 29(2), pages 409-451, June.

    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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