This paper uses a new cross-country cross-industry dataset on investment in tangible and intangible assets for 18 European countries and the US. We set out a framework for measuring intangible investment and capital stocks and their effect on output, inputs and total factor productivity (TFP). The analysis provides evidence on the diffusion of intangible investment across Europe and the US over the years [2000][2001][2002][2003][2004][2005][2006][2007][2008][2009][2010][2011][2012][2013] and offers growth accounting evidence before and after the Great Recession in 2008-2009. Our major findings are the following. First, tangible investment fell massively during the Great Recession and has hardly recovered, whereas intangible investment has been relatively resilient and recovered fast in the US but lagged behind in the EU. Second, the sources of growth analysis including only national account intangibles (software, R&D, mineral exploration and artistic originals) suggest that capital deepening is the main driver of growth, with tangibles and intangibles accounting for 80% and 20% in the EU, respectively, while both account for 50% in the US, over 2000-2013. Extending the asset boundary to the intangible assets not included in the national accounts (Corrado, Hulten and Sichel, 2005) makes capital deepening increase. The contribution of tangibles is reduced both in the EU and the US (60% and 40%, respectively) while intangibles account for a larger share (40% in EU and 60% in the US). Then, our analysis shows that since the Great Recession, the slowdown in labour productivity growth has been driven by a decline in TFP growth with relatively a minor role for tangible and intangible capital. Finally, we document a significant correlation between stricter employment protection rules and less government investment in R&D, and a lower ratio of intangible to tangible investment.

This paper looks at the channels through which intangible assets affect productivity growth. The econometric analysis exploits a new data set on intangible investment (INTAN‐Invest) in conjunction with EUKLEMS productivity estimates for 10 EU member states from 1998 to 2007. We find that (a) the output elasticity of intangible capital depends upon ICT intensity, consistent with complementarities between ICT and intangible capital; (b) non‐R&D intangible capital has a higher estimated output elasticity than its factor share, as does (c) an index of labour composition. The last two findings are consistent with growth spillovers from investments in knowledge‐based/intangible capital and skills.

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Off-Shoring and Productivity Growth in the Italian Manufacturing Industries Terms of use: Documents in AbstractWe study the relation between the off-shoring of intermediates and services and productivity growth in the Italian manufacturing industries in 1995-2003. Our results indicate that the offshoring of intermediates within the same industry ("narrow off-shoring") is beneficial for productivity growth, while the off-shoring of services is not. We also find that the way in which off-shoring is measured may matter considerably. The positive relation between offshoring of intermediates and productivity growth is there with our direct measures based on input-output data but disappears when either a broad measure or the Feenstra-Hanson offshoring measure employed in other studies are used instead.JEL Code: F16, F23, O4.Keywords: offshoring, productivity, growth, Italy, manufacturing, decline. We are very thankful to Massimiliano Iommi and Antonio Affuso, who shared with us the burden of preparing the data set for this project. Massimiliano is a component of our research team in a broader project on the use of input-output tables to measure the productivity counterpart of off-shoring in European countries. We also thank Giuseppe Bertola, Rosario Crinò, Paolo Epifani and the participants in the CESifo Munich Productivity and Growth Conference for their insightful comments on an earlier draft. Francesco Daveri gratefully acknowledges research funding from the Francesco Daveri Department of Economics