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The Stock of Intangible Capital in Canada: Evidence from the Aggregate Value of Securities

  • Nazim Belhocine

    (International Monetary Fund)

This paper measures the size of the stock of intangible capital in Canada using newly released data on the market value of all securities in the economy. The approach taken relies on a quantitative application of the q-theory of investment to generate the quantity of capital owned by firms. I find that the intangible capital stock accounted for approximately 30% of overall capital since 1994. Of this, the R&D reported by national accounts makes up only 23%. These results imply that official Canadian statistics failed to account for 26% of the value of the capital stock in their 2005 quarterly data collection. In addition, I find that the magnitude of the intangible capital stock is comparable to that reported using a cost approach, confirming the size of the findings and ascertaining the need to include intangibles in empirical models and in investment data.

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Paper provided by Queen's University, Department of Economics in its series Working Papers with number 1216.

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Length: 30 pages
Date of creation: Sep 2008
Date of revision:
Handle: RePEc:qed:wpaper:1216
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  1. Matthew D. Shapiro, 1986. "The Dynamic Demand for Capital and Labor," NBER Working Papers 1899, National Bureau of Economic Research, Inc.
  2. Bart Hobijn & Boyan Jovanovic, 2001. "The Information-Technology Revolution and the Stock Market: Evidence," American Economic Review, American Economic Association, vol. 91(5), pages 1203-1220, December.
  3. Boyan Jovanovic & Jeremy Greenwood, 1999. "The Information-Technology Revolution and the Stock Market," American Economic Review, American Economic Association, vol. 89(2), pages 116-122, May.
  4. Adams, James D, 1990. "Fundamental Stocks of Knowledge and Productivity Growth," Journal of Political Economy, University of Chicago Press, vol. 98(4), pages 673-702, August.
  5. John Laitner & Dmitriy Stolyarov, 2003. "Technological Change and the Stock Market," American Economic Review, American Economic Association, vol. 93(4), pages 1240-1267, September.
  6. Hashmat Khan & Charlotta Groth, 2007. "Investment Adjustment Costs: An Empirical Assessment," Carleton Economic Papers 07-08, Carleton University, Department of Economics, revised Dec 2010.
  7. Carol Corrado & Charles Hulten & Daniel Sichel, 2005. "Measuring Capital and Technology: An Expanded Framework," NBER Chapters, in: Measuring Capital in the New Economy, pages 11-46 National Bureau of Economic Research, Inc.
  8. Cabalero, R.J., 1997. "Aggregaete Investment," Working papers 97-20, Massachusetts Institute of Technology (MIT), Department of Economics.
  9. Nazim Belhocine, 2009. "Treating Intangible Inputs as Investment Goods: The Impact on Canadian GDP," IMF Working Papers 09/240, International Monetary Fund.
  10. Gellatly, Guy & Baldwin, John R., 2006. "Innovation Capabilities: The Knowledge Capital Behind the Survival and Growth of Firms," The Canadian Economy in Transition 2006013e, Statistics Canada, Economic Analysis.
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