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Intangible Investment and Firm Performance

Author

Listed:
  • Nathan Chappell

    (Motu Economic and Public Policy Research)

  • Adam Jaffe

    (Queensland University of Technology)

Abstract

We combine survey and administrative data for about 13,000 New Zealand firms from 2005 to 2013 to study intangible investment and firm performance. We find that firm size and moderate competition is associated with higher intangible investment, while firm age is associated with lower intangible investment. Examining firm performance, we find that higher investment is associated with higher labour and capital input, higher revenue, and higher firm-reported employee and customer satisfaction, but not with higher productivity or profitability. The evidence suggests that intangible investment is associated with growth and ‘soft’ performance objectives, but not with productivity or profitability.

Suggested Citation

  • Nathan Chappell & Adam Jaffe, 2018. "Intangible Investment and Firm Performance," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 52(4), pages 509-559, June.
    • Handle: RePEc:kap:revind:v:52:y:2018:i:4:d:10.1007_s11151-018-9629-9
    DOI: 10.1007/s11151-018-9629-9
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    More about this item

    Keywords

    Firm performance; Industrial policy; Intangible investment; Productivity;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm

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