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Intangible Capital and Labor Productivity Growth: Panel Evidence for the EU from 1998–2005
Author(s) -
Roth Felix,
Thum AnnaElisabeth
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/roiw.12009
Subject(s) - economics , intangible asset , panel data , investment (military) , productivity , monetary economics , labour economics , fixed investment , capital (architecture) , total factor productivity , asset (computer security) , human capital , macroeconomics , capital formation , financial capital , econometrics , finance , market economy , history , computer security , archaeology , politics , political science , computer science , law
Using new international comparable data on intangible capital investment by business within a panel analysis between 1998 and 2005 in an EU country sample, a positive and significant relationship between intangible capital investment and labor productivity growth is detected. This relationship proves to be robust to a range of alterations. The empirical analysis confirms previous findings that the inclusion of business intangible capital investment in the asset boundary of the national accounting framework increases the rate of change of output per hour worked more rapidly. In addition, intangible capital is able to explain a significant portion of the unexplained international variance in labor productivity growth, and becomes a dominant source of growth.