Investment in Intangible Capital: An Enterprise Perspective

Posted: 15 Dec 2005 Last revised: 1 Mar 2015

See all articles by Elizabeth Webster

Elizabeth Webster

Swinburne University of Technology; University of Melbourne - Melbourne Institute: Applied Economic & Social Research

Paul H. Jensen

University of Melbourne - Melbourne Institute of Applied Economic and Social Research

Multiple version iconThere are 2 versions of this paper

Date Written: April 8, 2011

Abstract

Since the amount of tangible matter in the world is fixed, the growth and deployment of intangible capital in the production process must be the sole source of productivity growth and thus our ability to enhance the (material) quality of life. This survey article takes stock of our knowledge about enterprise investment in intangible capital, most particularly, with respect to the current debate over its measurement, the types of market failure associated with its production and use, the mechanisms used to appropriate the returns it generates and the ways in which it is diffused throughout the economy. We argue that the most fruitful policy is to eliminate 'known' deadweight losses that have only small side effects on the incentive to create.

Keywords: Intangible capital, Innovation, Approppriability, Intellectual Property Rights

JEL Classification: L21, L22, L23, O31, J24

Suggested Citation

Webster, Elizabeth M. and Jensen, Paul H., Investment in Intangible Capital: An Enterprise Perspective (April 8, 2011). Economic Record, 2006 , Available at SSRN: https://ssrn.com/abstract=870071

Elizabeth M. Webster (Contact Author)

Swinburne University of Technology ( email )

Cnr Wakefield and William Streets, Hawthorn Victor
3122 Victoria, Victoria 3122
Australia

University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

Paul H. Jensen

University of Melbourne - Melbourne Institute of Applied Economic and Social Research ( email )

Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia

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