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Intangibles, Can They Explain the Dispersion in Return Rates?
Author(s) -
Görzig Bernd,
Gornig Martin
Publication year - 2013
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.2012.00525.x
Subject(s) - dispersion (optics) , economics , capital (architecture) , rate of return , monetary economics , econometrics , finance , physics , optics , archaeology , history
It is proven that the observed return rates on capital have an upward bias if firms are producing with unobserved intangible capital. Using a comprehensive firm level database for G ermany, this theoretical preposition is supported empirically. Furthermore, by making unobserved intangible capital observable, dispersion in return rates is dramatically reduced. The results support the assumption that a considerable part of the observed dispersion in return rates among firms is attributable to unobserved capital formation in intangible capital.