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Revisiting Intangible Capital and Labour Productivity Growth, 2000-2015: Accounting for the Crisis and Economic Recovery in the EU

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  • Roth, Felix

Abstract

This paper aims to revisit the relationship between intangible capital and labour productivity growth using the largest, up-to-date macro database (2000-2015) available to corroborate the econometric findings of earlier work and to generate novel econometric evidence by accounting for times of crisis (2008-2013) and economic recovery (2014-2015). To achieve these aims, this paper employs a cross-country growth accounting econometric estimation approach using the largest, up-to-date database available encompassing 16 EU countries over the time-period 2000-2015. The paper accounts for times of crisis (2008-2013) and of economic recovery (2014-2015). It separately estimates the contribution of three distinct dimensions of intangible capital: i) computerized information, ii) innovative property and iii) economic competencies. First, when accounting for intangibles, the paper finds that these have become the dominant source of labour productivity growth in the EU, explaining up to 66 percent of growth. Second, when accounting for times of crisis (2008-2013), in contrast to tangible capital, the paper detects a solid positive relationship between intangibles and labour productivity growth. Third, when accounting for the economic recovery (2014-2015), the paper finds a highly significant and remarkably strong relationship between intangible capital and labour productivity growth. This paper corroborates the importance of intangibles for labour productivity growth and thereby underlines the necessity to incorporate intangibles into today's national accounting frameworks in order to correctly depict the levels of capital investment being made in European economies. These levels are significantly higher than is currently reflected in official statistics.

Suggested Citation

  • Roth, Felix, 2020. "Revisiting Intangible Capital and Labour Productivity Growth, 2000-2015: Accounting for the Crisis and Economic Recovery in the EU," Hamburg Discussion Papers in International Economics 3, University of Hamburg, Chair of International Economics.
  • Handle: RePEc:zbw:uhhhdp:3
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    References listed on IDEAS

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    1. Felix Roth & Anna-Elisabeth Thum, 2022. "Intangible Capital and Labor Productivity Growth: Panel Evidence for the EU from 1998–2005," Contributions to Economics, in: Intangible Capital and Growth, chapter 0, pages 101-128, Springer.
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    Cited by:

    1. Roth, Felix & Sen, Ali & Rammer, Christian, 2021. "Intangible Capital and Firm-Level Productivity – Evidence from Germany," Hamburg Discussion Papers in International Economics 9, University of Hamburg, Chair of International Economics.
    2. Carolina Hintzmann & Josep Lladós-Masllorens & Raul Ramos, 2021. "Intangible Assets and Labor Productivity Growth," Economies, MDPI, vol. 9(2), pages 1-21, May.
    3. Kostarakos, Ilias & McQuinn, Kieran & Varthalitis, Petros, 2022. "Is Ireland the most Intangible Intensive Economy in Europe? A Growth Accounting Perspective," Papers WP719, Economic and Social Research Institute (ESRI).
    4. Tsakanikas, Aggelos & Roth, Felix & Caliò, Simone & Caloghirou, Yannis & Dimas, Petros, 2020. "The contribution of intangible inputs and participation in global value chains to productivity performance – Evidence from the EU-28, 2000-2014," Hamburg Discussion Papers in International Economics 5, University of Hamburg, Chair of International Economics.
    5. Roth, Felix & Sen, Ali, 2021. "Intangible Capital and Labor Productivity Growth: Revisiting the Evidence," Hamburg Discussion Papers in International Economics 10, University of Hamburg, Chair of International Economics.
    6. Roth, Felix, 2022. "Intangible Capital and Labor Productivity Growth – Revisiting the Evidence: An Update," Hamburg Discussion Papers in International Economics 11, University of Hamburg, Chair of International Economics.

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    More about this item

    Keywords

    intangible capital; labour productivity growth; crisis; recovery; European Union;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G01 - Financial Economics - - General - - - Financial Crises
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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