Investment in Intangible Capital: An Enterprise Perspective

15 Pages Posted: 8 May 2006

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

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Abstract

As 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 paper 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.

Suggested Citation

Webster, Elizabeth M. and Jensen, Paul H., Investment in Intangible Capital: An Enterprise Perspective. Economic Record, Vol. 82, No. 256, pp. 82-96, March 2006, Available at SSRN: https://ssrn.com/abstract=889142 or http://dx.doi.org/10.1111/j.1475-4932.2006.00296.x

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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