Intangible Capital and Labor Productivity Growth: Panel Evidence for the EU from 1998–2005

23 Pages Posted: 6 Aug 2013

See all articles by Felix Roth

Felix Roth

University of Goettingen (Gottingen)

Anna‐Elisabeth Thum

Centre for European Policy Studies (CEPS); European University Institute

Date Written: September 2013

Abstract

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.

Keywords: intangible capital, labor productivity growth, panel analysis, EU

JEL Classification: C23, O47, O52

Suggested Citation

Roth, Felix and Thum, Anna-Elisabeth, Intangible Capital and Labor Productivity Growth: Panel Evidence for the EU from 1998–2005 (September 2013). Review of Income and Wealth, Vol. 59, Issue 3, pp. 486-508, 2013. Available at SSRN: https://ssrn.com/abstract=2306444 or http://dx.doi.org/10.1111/roiw.12009

Felix Roth

University of Goettingen (Gottingen) ( email )

Wilhelmsplatz 1
Göttingen, 37073
Germany

Anna-Elisabeth Thum

Centre for European Policy Studies (CEPS) ( email )

1 Place du Congres
Brussels, 1000
Belgium

European University Institute

Villa Schifanoia
133 via Bocaccio
Firenze (Florence), Tuscany 50014
Italy

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