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Intangible Capital and Growth in Advanced Economies: Measurement and Comparative Results

Author

Listed:
  • Corrado, Carol
  • Haskel, Jonathan
  • Iommi, Massimiliano
  • Jona-Lasinio, Cecilia

Abstract

Conventional measures of business investment consist primarily of tangible assets such as plant and equipment, vehicles, office buildings and other commercial structures. Corrado, Hulten and Sichel (2005, 2009) show business investment in intangibles (software, design, R&D, branding, organizational capital) exceeds tangible investment for the United States. This paper presents a harmonized data set and analysis of intangible investment, 1995-2009, for the EU27, Norway and the US, and growth accounts including intangible capital for 14 countries. We find (a) intangible investment in the EU is less than the US, but the share of intangible investment in GDP has been growing faster than the share of tangible (b) between 1995 and 2007 capital deepening accounted for almost 50% of growth in the EU and 65% in the US, with intangible investment contributing around half of capital deepening (c) higher rates of intangible capital deepening are associated with higher TFP growth, consistent with spillovers from intangibles.

Suggested Citation

  • Corrado, Carol & Haskel, Jonathan & Iommi, Massimiliano & Jona-Lasinio, Cecilia, 2012. "Intangible Capital and Growth in Advanced Economies: Measurement and Comparative Results," CEPR Discussion Papers 9061, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:9061
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    References listed on IDEAS

    as
    1. Mokyr, Joel, 2005. "Long-Term Economic Growth and the History of Technology," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 17, pages 1113-1180 Elsevier.
    2. Adam M. Copeland & Gabriel W. Medeiros & Carol A. Robbins, 2007. "Estimating Prices for R&D Investment in the 2007 R&D Satellite Account," BEA Papers 0083, Bureau of Economic Analysis.
    3. 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.
    4. Martin L. Weitzman, 1976. "On the Welfare Significance of National Product in a Dynamic Economy," The Quarterly Journal of Economics, Oxford University Press, vol. 90(1), pages 156-162.
    5. Rachel Soloveichik, 2010. "Artistic Originals as a Capital Asset," American Economic Review, American Economic Association, vol. 100(2), pages 110-114, May.
    6. Carol Corrado & Peter Goodridge & Jonathan Haskel, 2011. "Constructing a Price Deflator for R&D: Calculating the Price of Knowledge Investments as a Residual," Economics Program Working Papers 11-03, The Conference Board, Economics Program.
    7. Carol A. Corrado & Charles R. Hulten, 2010. "How Do You Measure a "Technological Revolution"?," American Economic Review, American Economic Association, vol. 100(2), pages 99-104, May.
    8. Mary O'Mahony & Marcel P. Timmer, 2009. "Output, Input and Productivity Measures at the Industry Level: The EU KLEMS Database," Economic Journal, Royal Economic Society, vol. 119(538), pages 374-403, June.
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Financing Intangible Capital
      by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets on 2018-02-05 12:33:53

    Citations

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    Cited by:

    1. Carol A. Corrado & Charles R. Hulten, 2014. "Innovation Accounting," NBER Chapters,in: Measuring Economic Sustainability and Progress, pages 595-628 National Bureau of Economic Research, Inc.
    2. Pedro Bento & Diego Restuccia, 2017. "Misallocation, Establishment Size, and Productivity," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(3), pages 267-303, July.
    3. Kevin J. Fox & Peter Goodridge & Jonathan Haskel & Gavin Wallis, 2017. "Spillovers from R&D and Other Intangible Investment: Evidence from UK Industries," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63, pages 22-48, February.
    4. Cecilia Jona-Lasinio & Stefano Manzocchi, 2014. "Intangible Assets and Productivity Growth Differentials across EU Economies: The Role of ICT and R&D," Rivista di Politica Economica, SIPI Spa, issue 1, pages 355-381, January-M.
    5. Carol Corrado & Jonathan Haskel & Cecilia Jona-Lasinio, 2017. "Knowledge Spillovers, ICT and Productivity Growth," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 79(4), pages 592-618, August.
    6. Georg Licht & Bettina Peters & Christian Köhler & Franz Schwiebacher, 2014. "The Potential Contribution of Innovation Systems to Socio-Ecological Transition," WWWforEurope Deliverables series 4, WWWforEurope.
    7. Askenazy, Philippe & Erhel, Christine, 2015. "The French Productivity Puzzle," IZA Discussion Papers 9188, Institute for the Study of Labor (IZA).
    8. repec:eee:chieco:v:46:y:2017:i:s:p:s50-s64 is not listed on IDEAS
    9. repec:sls:ipmsls:v:33:y:2017:2 is not listed on IDEAS
    10. Kyoji Fukao, 2013. "Explaining Japan's Unproductive Two Decades," Asian Economic Policy Review, Japan Center for Economic Research, vol. 8(2), pages 193-213, December.
    11. Wen Chen & Robert Inklaar, 2016. "Productivity spillovers of organization capital," Journal of Productivity Analysis, Springer, vol. 45(3), pages 229-245, June.
    12. repec:dgr:rugggd:gd-135 is not listed on IDEAS
    13. Chiara Criscuolo & Angelo Secchi, 2016. "Resources (mis)allocation, innovation and the competitiveness of Europe," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 43(1), pages 1-9, March.
    14. MIYAGAWA Tsutomu & TAKIZAWA Miho & EDAMURA Kazuma, 2013. "Does the Stock Market Evaluate Intangible Assets? An empirical analysis using data of listed firms in Japan," Discussion papers 13052, Research Institute of Economy, Trade and Industry (RIETI).
    15. Bernadette Biatour & Chantal Kegels, 2015. "Working Paper 06-15 - Labour productivity growth in Belgium - Long-term trend decline and possible actions," Working Papers 1506, Federal Planning Bureau, Belgium.
    16. Ander Perez-Orive & Andrea Caggese, 2017. "Capital Misallocation and Secular Stagnation," 2017 Meeting Papers 382, Society for Economic Dynamics.
    17. Dan ANDREWS & Chiara CRISCUOLO & Dirk PILAT, 2015. "The Future of Productivity Improving the Diffusion of Technology and Knowledge," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(100), pages 85-105, 4th quart.
    18. Marcel P. Timmer & Abdul Azeez Erumban & Bart Los & Robert Stehrer & Gaaitzen J. de Vries, 2014. "Slicing Up Global Value Chains," Journal of Economic Perspectives, American Economic Association, vol. 28(2), pages 99-118, Spring.
    19. 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.
    20. Luigi Bonatti, 2016. "Anemic economic growth in advanced economies: structural factors and the impotence of expansionary macroeconomic policies," DEM Working Papers 2016/11, Department of Economics and Management.
    21. repec:bla:revinw:v:63:y:2017:i::p:s411-s436 is not listed on IDEAS

    More about this item

    Keywords

    growth; intangibles; investment;

    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
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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