Working Paper: NBER ID: w30376
Authors: Nicolas Crouzet; Janice C. Eberly; Andrea L. Eisfeldt; Dimitris Papanikolaou
Abstract: We propose a model that starts from the premise that intangible capital needs to be stored on some medium --- software, patents, essential employees --- before it can be utilized in production. Storage implies that intangible capital may be partially non-rival within the firm, leading to scale economies. However, storage can also compromise the ability of the firm to fully appropriate the returns generated by intangibles. We explore the implications of these two mechanisms for firm scale, scope, and investment decisions, and we outline their connection to recent macroeconomic and financial trends in the US.
Keywords: No keywords provided
JEL Codes: E01; E22; G11; G31; O34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| nonrivalry (H41) | scalability in production (E23) |
| stock of intangibles (E22) | firm span (L10) |
| limited excludability (H13) | suboptimal investment levels (E22) |
| ease of appropriation of returns from intangibles (O34) | level of investment in intangibles (E22) |
| growth and expansion of firms (D25) | potential for imitation (L15) |
| potential for imitation (L15) | returns on intangible investments (G31) |