Knowledge Spillovers, ICT and Productivity Growth

What are the channels through which intangible assets affect productivity? The econometric analysis discussed in this report exploits a new dataset on intangible investment (INTAN-Invest) in conjunction with EUKLEMS productivity estimates for 10 EU member states from 1998 to 2007. The authors find that the marginal impact of ICT capital is higher when it is complemented with intangible capital, and non-R&D intangible capital has a higher estimated output elasticity than its conventionally calculated factor share. These findings suggest investments in knowledge-based capital produce productivity growth spillovers via mechanisms beyond those previously established for R&D.

This working paper is complimentary.