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Intangible capital and productivity: Firm-level evidence from German manufacturing

Author

Listed:
  • Wolfhard Kaus
  • Viktor Slavtchev
  • Markus Zimmermann

Abstract

This article analyses the importance of intangible capital for firm productivity using comprehensive official firm-level data from German manufacturing. Both aggregate intangible investment and the share of investing firms increase over time. However, the distribution of intangible investment is heavily right-skewed, with many firms investing nothing or little and few investing a lot. This holds both for manufacturing overall and within narrowly defined industries. The group of top investors is highly persistent from year to year, and persistence increases over time. Production function estimations reveal a positive output elasticity of intangible capital which is small on average but increases substantially with firm-level intangible capital intensity. There are also effect heterogeneities by firm size and enterprise group membership, especially among high-intangible-intensive firms. Finally, considering intangibles as production factors reduces the measured dispersion of Total Factor Productivity (TFP), mainly by tightening the upper part of the TFP distribution.

Suggested Citation

  • Wolfhard Kaus & Viktor Slavtchev & Markus Zimmermann, 2024. "Intangible capital and productivity: Firm-level evidence from German manufacturing," Oxford Economic Papers, Oxford University Press, vol. 76(4), pages 970-996.
    • Handle: RePEc:oup:oxecpp:v:76:y:2024:i:4:p:970-996.
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    File URL: http://hdl.handle.net/10.1093/oep/gpad051
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    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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