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I.T. Investment and intangibles: evidence from banks

Author

Listed:
  • Alfredo Martín-Oliver

    (Banco de España)

  • Vicente Salas-Fumás

    (Universidad de zaragoza)

Abstract

This paper models the investment behaviour of a multi-asset firm with market power that accumulates valuable intangible assets to complement the IT capital. The investment model is estimated using data from Spanish banks on assets of different nature: material (branches, financial), immaterial (advertising and IT) and intangible (training of workers). The paper estimates that the representative bank spends five additional Euros per Euro invested in IT-related assets in complementary intangible assets or, equivalently, intangibles amount to approximately 10% of the economic value of the representative bank. The remaining economic value is distributed between 28% from rents attributed to market power, and 62% to the cost of market-purchased assets.

Suggested Citation

  • Alfredo Martín-Oliver & Vicente Salas-Fumás, 2010. "I.T. Investment and intangibles: evidence from banks," Working Papers 1020, Banco de España.
    • Handle: RePEc:bde:wpaper:1020
    as

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    References listed on IDEAS

    as
    1. Charles R. Hulten & Xiaohui Hao, 2008. "What is a Company Really Worth? Intangible Capital and the "Market to Book Value" Puzzle," NBER Working Papers 14548, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Hiroki Arato & Katsunori Yamada, 2012. "Japan's Intangible Capital and Valuation of Corporations in a Neoclassical Framework," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(4), pages 459-478, October.

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    More about this item

    Keywords

    multi-asset firm; investment; intangible assets; banks;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing

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