Knowledge Spillovers, ICT and Productivity Growth

Abstract

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.

Are intangibles more productive in ICT-intensive industries? Evidence from EU countries

“…A major limitation of their analysis is that it does not account for differences in intangible investment across industries. Corrado et al (2014) find an interaction between ICT intensity and intangible investment that is both statistically and economically significant. Meanwhile the overall magnitude of the output elasticity of intangibles remains implausibly large with values ranging between 0.4 and 0.7 depending on the method of estimation.…”

“…This practice has its antecedents in literature that analyses the impact of financial development on industry growth (Rajan and Zingales, 1998) 7 and has been used in the previous work on productivity in ICT-intensive sectors (Corrado, Haskel and Jona-Lasinio, 2014). This specification allows us to directly examine whether capital inputs are more productive in more ICT-intensive industries.…”

“…While the interaction between ICT-intensity and specific intangibles (such as organisational capital) has been investigated in a number of microeconomic studies, evidence at the sectoral and macroeconomic level for assets other than research and development (R&D) has been lacking until recently. Corrado, Haskel and Jona-Lasinio (2014) are the first to examine whether the contribution of intangibles to productivity growth depends on the ICT-intensity of an industry using cross-country data. Their analysis follows a differencein-difference approach akin to Rajan and Zingales (1998) by interacting the industry ICT intensity with the level of intangible investment in the country.…”

Modelling the joint impact of R&D and ICT on productivity: A frontier analysis approach

“…Papers have shown that these assets explain a significant proportion of the growth in total factor productivity in recent years (Corrado et al 2017, Niebel et al 2017), but their impact via technical change and technical efficiency is largely unknown. Our analysis adds to the interpretation of how investments in intangible assets, which include both R&D and computerized software among others, translate into greater productivity outcomes.…”

“…Evidence on the joint role of the two assets has been provided by Hall et al (2013) at the firm level and Venturini (2015) at the country level, both concluding that these investments have independent effects on Total Factor Productivity (TFP). Conversely, Corrado et al (2017) document the presence of complementarities between ICT and intangible capital, which include not only R&D but other innovative activities such as new architectural and engineering design and new product development. However, apart from these few exceptions, the literature is silent about the joint productivity impact of R&D and ICT and the channels through which they affect productivity growth.…”