Measuring Capital in the New Economy, Carol Corrado, John Haltiwanger and Dan Sichel, editors, University of Chicago Press, 2005
43 Pages Posted: 19 Dec 2013
Date Written: August 2005
In this paper we reviewed two findings pertinent for using asset market data to make inferences about the intangible capital stock. We presented evidence familiar from the empirical finance literature that returns are heterogeneous when firms are grouped according to their ratio of market equity to book equity. This evidence suggests that there are important differences in the riskiness of investment in measured capital vis-à-vis intangible capital. This has potentially important ramifications for how to build explicit economic models to use in constructing measurements of the intangible capital stock.
Keywords: Intangible Risk, Value Premium, Adjustment Costs
JEL Classification: C11, E22, G12
Suggested Citation: Suggested Citation