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Intangible capital and firms productivity

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  • R. Paci
  • M. Pontis
  • E. Marrocu

Abstract

Firms competitive strategies and performances in industrialised countries is increasingly based on assets, labelled as "intangible capital", such as the inventions of new processes and products, the improvements of the employees skill, the creation of a reputation for company's products. The aim of this paper is to evaluate the role of internal intangible capital on firms productivity in addition to the well-known one played by traditional inputs. Moreover, firms productivity is crucially affected by the external socio-economic conditions; thus, we control for the availability of intangible assets specific to the region (human, technological and social capital) as well as for the regional infrastructural endowments. In our empirical application we analyse a large panel of European companies belonging to 116 regions of six countries, considered over the period 2002-2006. The estimation results - robust to various ways of disaggregating the sample data (by country, macro-sector and firms dimension) and to different econometric methodologies (IV, Olley-Pakes, Levinsohn-Petrin) - show the positive influence of the internal intangible capital on firms productivity levels and also the crucial role played by the intangible assets at the regional level. These results remark the importance of policies designed to stimulate the accumulation of intangible capital stocks internal to the firms through appropriate fiscal policies and to create a favourable external environment based on high endowments of human, social and technological capital.

Suggested Citation

  • R. Paci & M. Pontis & E. Marrocu, 2009. "Intangible capital and firms productivity," Working Paper CRENoS 200916, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
  • Handle: RePEc:cns:cnscwp:200916
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    Cited by:

    1. Arrighetti, Alessandro & Landini, Fabio & Lasagni, Andrea, 2014. "Intangible assets and firm heterogeneity: Evidence from Italy," Research Policy, Elsevier, vol. 43(1), pages 202-213.
    2. Cristiano Antonelli & Alessandra Colombelli, 2018. "The cost of knowledge," Chapters, in: The Evolutionary Complexity of Endogenous Innovation, chapter 6, pages 128-150, Edward Elgar Publishing.
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    4. Stéphane Lhuillery & Julio Raffo & Intan Hamdan-Livramento, 2016. "Measuring creativity: Learning from innovation measurement," WIPO Economic Research Working Papers 31, World Intellectual Property Organization - Economics and Statistics Division.
    5. Cecilia Jona Lasinio & Stefano Manzocchi & Valentina Meliciani, 2017. "Knowledge Based Capital and Value Creation in Global Supply Chains," Working Papers LuissLab 17134, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    6. Michele Battisti & Filippo Belloc & Massimo Del Gatto, 2015. "Unbundling Technology Adoption and tfp at the Firm Level: Do Intangibles Matter?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 24(2), pages 390-414, June.
    7. Autant-Bernard, Corinne & Guironnet, Jean-Pascal & Massard, Nadine, 2011. "Agglomeration and social return to R&D: Evidence from French plant productivity changes," International Journal of Production Economics, Elsevier, vol. 132(1), pages 34-42, July.
    8. Barbara Dettori & Emanuela Marrocu & Raffaele Paci, 2012. "Total Factor Productivity, Intangible Assets and Spatial Dependence in the European Regions," Regional Studies, Taylor & Francis Journals, vol. 46(10), pages 1401-1416, November.
    9. Bishwanath Goldar & Yashobanta Parida, 2017. "Intangible Capital and Firm Productivity," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 18(2), pages 246-275, September.
    10. Alessandro Arrighetti & Fabio Landini & Andrea Lasagni, 2015. "Intangible Asset Dynamics and Firm Behaviour," Industry and Innovation, Taylor & Francis Journals, vol. 22(5), pages 402-422, July.
    11. Kümpel, Arndt, 2011. "Устойчивое региональное развитие, инновации и государствeнный потенциал [Sustainable regional development, innovation and state capacity]," MPRA Paper 33967, University Library of Munich, Germany, revised 08 Oct 2011.
    12. Raffaele Paci & Emanuela Marrocu, 2013. "Knowledge Assets and Regional Performance," Growth and Change, Wiley Blackwell, vol. 44(2), pages 228-257, June.
    13. Yang, Shenglang & Shi, Xunpeng, 2018. "Intangible capital and sectoral energy intensity: Evidence from 40 economies between 1995 and 2007," Energy Policy, Elsevier, vol. 122(C), pages 118-128.
    14. Antonelli, Cristiano & Colombelli, Alessandra, 2015. "The knowledge cost function," International Journal of Production Economics, Elsevier, vol. 168(C), pages 290-302.
    15. Jona-Lasinio, Cecilia & Manzocchi, Stefano & Meliciani, Valentina, 2019. "Knowledge based capital and value creation in global supply chains," Technological Forecasting and Social Change, Elsevier, vol. 148(C).
    16. A. Arrighetti & F. Landini & A. Lasagni, 2015. "Firms’economic crisis and firm exit: do intangibles matters?," Economics Department Working Papers 2015-EP04, Department of Economics, Parma University (Italy).
    17. MORIKAWA Masayuki, 2012. "Financial Constraints in Intangible Investments: Evidence from Japanese firms," Discussion papers 12045, Research Institute of Economy, Trade and Industry (RIETI).
    18. Kümpel, Arndt, 2011. "Sustainable regional development, innovation and state capacity," MPRA Paper 33966, University Library of Munich, Germany, revised 08 Oct 2011.
    19. Paz Rico & Bernardí Cabrer-Borrás & María Mar Benavides-Espinosa, 2020. "Intangible capital and business productivity in the hotel industry," International Entrepreneurship and Management Journal, Springer, vol. 16(2), pages 691-707, June.
    20. Orlic, Edvard & Hashi, Iraj & Hisarciklilar, Mehtap, 2018. "Cross sectoral FDI spillovers and their impact on manufacturing productivity," International Business Review, Elsevier, vol. 27(4), pages 777-796.
    21. Cristiano Antonelli & Francesco Crespi & Giuseppe Scellato, 2018. "Productivity growth persistence: firm strategies, size and system properties," Chapters, in: The Evolutionary Complexity of Endogenous Innovation, chapter 8, pages 176-202, Edward Elgar Publishing.
    22. 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.
    23. Andonova, Veneta & Ruíz-Pava, Guillermo, 2016. "The role of industry factors and intangible assets in company performance in Colombia," Journal of Business Research, Elsevier, vol. 69(10), pages 4377-4384.
    24. 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.
    25. Crass, Dirk & Peters, Bettina, 2014. "Intangible assets and firm-level productivity," ZEW Discussion Papers 14-120, ZEW - Leibniz Centre for European Economic Research.

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    More about this item

    Keywords

    local externalities; intangible capital; firms productivity;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • 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

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