Unbundling Technology Adoption and tfp at the Firm Level: Do Intangibles Matter?

We use a panel of European firms to investigate the relationship between intangible assets and productivity. We distinguish between total factor productivity ( tfp ) and technology adoption, whereas standard estimations consider only a notion of productivity that conflates the two effects. Although we are unable to address simultaneity, we allow for the existence of multiple technologies within sectors through a mixture model approach. We find that intangible assets have nonnegligible effects that both push firms toward better technologies ( technology adoption effects) and allow for more efficient exploitation of a given technology ( tfp effects).