Intangible Capital, Markups, and Productivity Growth

39 Pages Posted: 9 May 2024

See all articles by Cecilia Jona Lasinio

Cecilia Jona Lasinio

Luiss Guido Carli University - Luiss Business School

Stefano Manzocchi

LUISS University; Luiss University - Department of Economics and Finance

Enrico Marvasi

Departiment of Economics, Roma Tre University

Date Written: May 9, 2024

Abstract

In this paper, we explore whether and to what extent the interplay between intangible capital and markups contributed to labour productivity growth paths across a sample of European economies and the US over the years 1995-2020. Both the US and the EU have experienced a prolonged productivity slowdown, but the US productivity growth remains more sustained, despite rising market power concerns. Using new EUKLEMS&INTANProd country-sector data, we show that the EU economies are characterized by slightly declining markups, whereas the opposite is true for the US. Similar diverging trends can be observed for productivity, especially if we consider the intangible-intensive sectors. We also find a positive correlation between intangibles and markups and show that the contribution of intangible capital accumulation to labour productivity growth is larger where markups are higher (in the US). Our findings suggest that the synergies between intangible capital accumulation and market power are critical elements to better understand productivity growth differentials and the factors determining the productivity slowdown.

Keywords: intangibles, market power, markup, productivity

JEL Classification: E22, E01, O47

Suggested Citation

Jona Lasinio, Cecilia and Manzocchi, Stefano and Manzocchi, Stefano and Marvasi, Enrico, Intangible Capital, Markups, and Productivity Growth (May 9, 2024). Available at SSRN: https://ssrn.com/abstract=4822718 or http://dx.doi.org/10.2139/ssrn.4822718

Cecilia Jona Lasinio

Luiss Guido Carli University - Luiss Business School ( email )

Via Nomentana, 216
Roma, 00162
Italy

Stefano Manzocchi

LUISS University ( email )

Viale Romania, 32
Rome, 00197
Italy

Luiss University - Department of Economics and Finance ( email )

Viale Romania, 32
Rome, 00197
Italy

Enrico Marvasi (Contact Author)

Departiment of Economics, Roma Tre University ( email )

via Silvio D'Amico 77
Rome, 00145
Italy

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