Intangible Investment in Japan: Measurement and Contribution to Economic Growth
The purpose of this paper is to measure intangible assets, to construct the capital stock of intangible assets, and to examine the contribution of intangible capital to economic growth in Japan. We follow the approach of Corrado, Hulten, and Sichel (2005, 2006) to measure intangible investment using the 2006 version of the Japan Industry Productivity Database. We find that the ratio of intangible investment to GDP in Japan has risen during the past 20 years and now stands at 7.5%. However, the ratios of intangible investment to GDP and of intangible to tangible investment in Japan are smaller than the values estimated for the US by Corrado et al. (2006). In addition, we find that the growth rate for intangible capital in Japan declined from the 1980s to the 1990s, which is in stark contrast to the high growth rate for intangible capital in the US in the late 1990s. Therefore, the contribution of intangible capital to total labor productivity growth in Japan is substantially smaller than in the US.
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