Intangible Assets and Labor Productivity Growth

Abstract

We examine the contribution to labor productivity growth in the manufacturing sector of investment in different intangible asset categories—computerized information, innovative property, and economic competencies—for a set of 18 European countries between 1995 and 2017, as well as whether this contribution varies between different groups of countries. The motivation is to go a step further and identify which single or combination of intangible assets are relevant. The main findings can be summarized as follows. Firstly, all the three different categories of intangible assets contribute to labor productivity growth. In particular, intangible assets related to economic competences together with innovative property assets have been identified as the main drivers; specifically, advertising and marketing, organizational capital, research and development (R&D) investment, and design. Secondly, splitting the sample of European Union (EU) member states into three groups—northern, central and southern Europe—allows for the identification of a significant differentiated behavior between and within groups, in terms of the effects of investment in intangible assets on labor productivity growth. We conclude that measures promoting investment in intangibles at EU level should be accompanied by specific measures focusing on each country’s needs, for the purpose of promoting labor productivity growth. The obtained evidence suggests that the solution for the innovation deficit of some European economies consist not only of raising R&D expenditure, but also exploiting complementarities between different types of assets.

Intellectual capital and bank’s performance: a cross-national approach

“…IC consists of two major categories of intangible assets of the organization, which are organizational capital and HC [Organization for Economic Co-operation and Development (OECD), 1999]. Much literature investigated the essentialities of HC in IC using the SNM (Edvinsson and Malone, 1997;Chen, 2009;Rosi nska et al, 2019;Rezaei et al, 2020;Mata et al, 2021;Hintzmann et al, 2021) and came up with the result that HC plays an important role in laying the foundation for the IC of the organization. HC creates a linkage between the business system and the management structure (Bollen et al, 2005).…”

“…HC is extremely important for developing organizations because it contributes to boosting production and profitability. The people (leaders, directors and employees) who make up an organization's HC are considered its most valuable asset Hintzmann et al, (2021). HC and employee engagement have an impact on a company's competitive edge (Dalwai et al, 2021a(Dalwai et al, , 2021b.…”

“…IC is a combination of knowledge located in various sources, such as employees, the relational approach of the organization and the implemented managerial systems. It can be classified into three dimensions: human capital (HC), structural capital (SC) and relational capital (RC) (Edvinsson and Malone, 1997; Chen et al , 2005; Kamaşak and Bulutlar, 2010; Kamath, 2007; Lim, 2018; Iqbal, 2018; Ousama et al , 2020; Hintzmann et al , 2021).…”

Total Factor Productivity and Intangible Capital in Different Levels of Technology: A Case Study of Iranian Manufacturing Industries

“…Rico and Cebrer-Bares (2020) found a positive effect of intangible capital on Spanish companies' productivity. Hintzmann et al (2021) examined the labor productivity growth in the manufacturing sector in a different set of 18 European countries between 1995 and 2017. The main findings are all the three different categories (CHS approach) of intangible assets contribute to labor productivity growth.…”

Is Ireland the Most Intangible Intensive Economy in Europe? A Growth Accounting Perspective.

“…Our paper also contributes to the rapidly growing literature that computes the contribution of intangible assets on economic growth in various countries; one strand of the literature focuses on using a standard growth accounting approach in order to decompose labour productive growth into the contributions of the factor shares; a non-exhaustive list includes Corrado et al (2013Corrado et al ( , 2016Corrado et al ( , 2018, Niebel et al (2017) and Piekkola (2018). Another branch utilizes panel econometric techniques in order to quantify the relationship between intangible capital and labour productivity growth -see, among others, Roth & Thum (2013), Roth (2020), Hintzmann et al (2021, Roth & Sen (2021). Finally, Chen et al (2016) and Corrado et al (2017) focused on analyzing capital asset complementarities and spillover effects.…”