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Measuring Intangible Investment

Author

Listed:
  • L. C. Hunter

    (School of Business and Management, University of Glasgow)

  • Elizabeth Webster

    (Centre for Microeconometrics, Melbourne Institute of Applied Economic and Social Research, and Intellectual Property Research Institute of Australia, The University of Melbourne)

  • Anne Wyatt

    (Department of Accounting, University of Adelaide)

Abstract

Recent years have seen a growth in the literature on a variety of aspects of intangible investment, the complement of the more familiar investment in tangible assets such as buildings, plant, and equipment. For economic and business analysts this change in emphasis necessitates the selection of a meaningful metric for intangible investment and the firm’s total capital stock of tangible and intangible assets, which is not provided by conventional accounting systems. This gives rise to a deficiency of information for two principal audiences: shareholders and external stakeholders in the firm and the internal management of the firm. Information to know and understand the level of returns to past investments; and to form expectations about future investments, their returns, and risk profiles is accordingly missing. This paper builds on recent studies focusing on this problem to (1) characterize the nature and implications of the information deficiency; and (2) develop an intangible metric that illustrates what can be achieved with suitable accounting data.

Suggested Citation

  • L. C. Hunter & Elizabeth Webster & Anne Wyatt, 2005. "Measuring Intangible Investment," Melbourne Institute Working Paper Series wp2005n15, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2005n15
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    File URL: http://melbourneinstitute.unimelb.edu.au/downloads/working_paper_series/wp2005n15.pdf
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    References listed on IDEAS

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    Cited by:

    1. Rammer, Christian & Köhler, Christian & Murmann, Martin & Pesau, Agnes & Schwiebacher, Franz & Kinkel, Steffen & Kirner, Eva & Schubert, Torben & Som, Oliver, 2010. "Innovationen ohne Forschung und Entwicklung: Eine Untersuchung zu Unternehmen, die ohne eigene FuE-Tätigkeit neue Produkte und Prozesse einführen," Studien zum deutschen Innovationssystem 15-2011, Expertenkommission Forschung und Innovation (EFI) - Commission of Experts for Research and Innovation, Berlin.
    2. Russell Thomson, 2010. "Tax Policy and R&D Investment by Australian Firms," The Economic Record, The Economic Society of Australia, vol. 86(273), pages 260-280, June.
    3. Bernd Görzig & Martin Gornig, 2013. "Intangibles, Can They Explain the Dispersion in Return Rates?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(4), pages 648-664, December.
    4. Dan Andrews & Chiara Criscuolo, 2013. "Knowledge-Based Capital, Innovation and Resource Allocation," OECD Economics Department Working Papers 1046, OECD Publishing.

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