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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

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    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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    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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