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Regional Patterns of Intangible Capital, Agglomeration Effects and Localised Spillovers in Germany

Author

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  • Kurt Geppert
  • Anne Neumann

Abstract

We use a large micro-dataset to assess the importance of intangible capital - organisation, R&D and ICT capital - for the economic performance of establishments and regions in Germany. In 2003 self-produced intangible capital accounted for more than one fifth of the total capital stock of estab-lishments. More than half of the intangible capital is R&D capital. This high proportion is mainly due to a relatively strong and research-intensive manufacturing sector in Germany. At the regional level, we find descriptive evidence for a positive relationship between intangible capital and the economic performance of regions. This is true both for the level of economic activities and for growth. The results of cross-sectional regressions for the years from 1999 to 2003 indicate that dou-bling the intangible capital intensity of establishments increases the average wage levels by one percent. Regarding the regional economic environment of establishments, we find that the substan-tial net advantages of agglomeration have more to do with broad knowledge and diversity than with regional clustering and specialisation. Separate regressions for the wage levels of non-intangible workers show very similar results. These workers can share the rents of the activities of intangible workers. Thus, intangible capital generates positive externalities not only at the regional level, but also at the level of establishments.

Suggested Citation

  • Kurt Geppert & Anne Neumann, 2011. "Regional Patterns of Intangible Capital, Agglomeration Effects and Localised Spillovers in Germany," Discussion Papers of DIW Berlin 1112, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp1112
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    More about this item

    Keywords

    Firm productivity; intangible capital; agglomeration; local spillovers;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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