Working Paper: NBER ID: w14108
Authors: Maria Elena Bontempi; Jacques Mairesse
Abstract: The paper examines the size and productivity of total intangible capital relative to total tangible capital for a large panel of Italian Manufacturing firms. In the analysis, we decompose total intangibles in two different ways: in intangibles expensed in firms' current accounts (as usually considered in empirical studies) versus intangible capitalized in firms' balance sheets (usually not considered); and in "intellectual capital" (i.e. R&D expenditures, and patenting and related costs) versus "customer capital" (i.e., advertising expenditure, and trademarks and related costs). We systematically assess the robustness of our results by using different specifications of the production functions implying different elasticities of substitution between tangible and intangible capital, and comparing different panel data estimates. Our results underscore that firms' accounting information on intangible investments is genuinely informative, showing that intangible capital and its different components are at least as productive as tangible capital.
Keywords: Intangible Capital; Productivity; Italian Manufacturing Firms
JEL Codes: C23; C52; D24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| intangible capital (E22) | productivity (O49) |
| intellectual capital (O34) | productivity (O49) |
| customer capital (G31) | productivity (O49) |
| intangible capital (E22) | output (C67) |
| output (C67) | productivity (O49) |
| intangible investments (E22) | productivity (O49) |
| marginal productivity of intangibles (E22) | productivity (O49) |