IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/38648.html
   My bibliography  Save this paper

Intangible training capital and productivity in Europe

Author

Listed:
  • O’Mahony, Mary
  • Peng, Fei

Abstract

This paper employs industry data, derived from linking the EU LFS to productivity accounts from EU KLEMS, to examine workforce training and productivity in European Union original members states. Training activities are modelled as intangible investments by firms and cumulated to stocks so their impact can be evaluated within a production function framework, including links to the use of information and communications technology (ICT). The results suggest significantly positive effects of training on productivity, both direct and interacted with ICT, with different impacts in services than in production industries. These results are robust to the use of instrumental variables methods, both lagged instruments and a set of variables that capture features of the operation of labour markets.

Suggested Citation

  • O’Mahony, Mary & Peng, Fei, 2011. "Intangible training capital and productivity in Europe," MPRA Paper 38648, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:38648
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/38648/1/MPRA_paper_38648.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2003. "Instrumental variables and GMM: Estimation and testing," Stata Journal, StataCorp LP, vol. 3(1), pages 1-31, March.
    2. Vieira, Flávio & MacDonald, Ronald & Damasceno, Aderbal, 2012. "The role of institutions in cross-section income and panel data growth models: A deeper investigation on the weakness and proliferation of instruments," Journal of Comparative Economics, Elsevier, vol. 40(1), pages 127-140.
    3. Anna Vignoles & Fernando Galindo‐Rueda & Leon Feinstein, 2004. "The Labour Market Impact of Adult Education and Training: A Cohort Analysis," Scottish Journal of Political Economy, Scottish Economic Society, vol. 51(2), pages 266-280, May.
    4. Mauro Giorgio Marrano & Jonathan Haskel, 2006. "How Much Does the UK Invest in Intangible Assets?," Working Papers 578, Queen Mary University of London, School of Economics and Finance.
    5. Carol Corrado & Charles Hulten & Daniel Sichel, 2005. "Measuring Capital and Technology: An Expanded Framework," NBER Chapters, in: Measuring Capital in the New Economy, pages 11-46, National Bureau of Economic Research, Inc.
    6. Kyoji Fukao & Tsutomu Miyagawa & Kentaro Mukai & Yukio Shinoda & Konomi Tonogi, 2009. "Intangible Investment In Japan: Measurement And Contribution To Economic Growth," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(3), pages 717-736, September.
    7. Timothy F. Bresnahan & Erik Brynjolfsson & Lorin M. Hitt, 2002. "Information Technology, Workplace Organization, and the Demand for Skilled Labor: Firm-Level Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(1), pages 339-376.
    8. Dale W. Jorgenson & Barbara M. Fraumeni, 1992. "The Output of the Education Sector," NBER Chapters, in: Output Measurement in the Service Sectors, pages 303-341, National Bureau of Economic Research, Inc.
    9. Griliches, Zvi & Hausman, Jerry A., 1986. "Errors in variables in panel data," Journal of Econometrics, Elsevier, vol. 31(1), pages 93-118, February.
    10. Lorraine Dearden & Howard Reed & John Van Reenen, 2006. "The Impact of Training on Productivity and Wages: Evidence from British Panel Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(4), pages 397-421, August.
    11. Sandra E. Black & Lisa M. Lynch, 2001. "How To Compete: The Impact Of Workplace Practices And Information Technology On Productivity," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 434-445, August.
    12. Irene Bertschek & Ulrich Kaiser, 2004. "Productivity Effects of Organizational Change: Microeconometric Evidence," Management Science, INFORMS, vol. 50(3), pages 394-404, March.
    13. Mary O'Mahony & Marcel P. Timmer, 2009. "Output, Input and Productivity Measures at the Industry Level: The EU KLEMS Database," Economic Journal, Royal Economic Society, vol. 119(538), pages 374-403, June.
    14. Mauro Giorgio Marrano & Jonathan Haskel & Gavin Wallis, 2009. "What Happened To The Knowledge Economy? Ict, Intangible Investment, And Britain'S Productivity Record Revisited," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(3), pages 686-716, September.
    15. Philippe Aghion & Steven Durlauf (ed.), 2005. "Handbook of Economic Growth," Handbook of Economic Growth, Elsevier, edition 1, volume 1, number 1.
    16. Carol Corrado & John Haltiwanger & Daniel Sichel, 2005. "Measuring Capital in the New Economy," NBER Books, National Bureau of Economic Research, Inc, number corr05-1.
    17. Daron Acemoglu, 1998. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1055-1089.
    18. Black, Sandra E & Lynch, Lisa M, 1996. "Human-Capital Investments and Productivity," American Economic Review, American Economic Association, vol. 86(2), pages 263-267, May.
    19. Ethan Lewis, 2005. "Immigration, Skill Mix, and the Choice of Technique," Working Papers 05-04, Center for Economic Studies, U.S. Census Bureau.
    20. Thomas Hempell & Thomas Zwick, 2008. "New Technology, Work Organisation, And Innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 17(4), pages 331-354.
    21. Axel Dreher & Martin Gassebner, 2007. "Greasing the Wheels of Entrepreneurship? The Impact of Regulations and Corruption on Firm Entry," KOF Working papers 07-166, KOF Swiss Economic Institute, ETH Zurich.
    22. Stephen Machin & John Van Reenen, 1998. "Technology and Changes in Skill Structure: Evidence from Seven OECD Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1215-1244.
    23. Inklaar, Robert & Timmer, Marcel P., 2008. "GGDC Productivity Level Database: International Comparisons of Output, Inputs and Productivity at the Industry Level," GGDC Research Memorandum GD-104, Groningen Growth and Development Centre, University of Groningen.
    24. Niklas Potrafke, 2009. "Did globalization restrict partisan politics? An empirical evaluation of social expenditures in a panel of OECD countries," Public Choice, Springer, vol. 140(1), pages 105-124, July.
    25. repec:dgr:rugggd:gd-104 is not listed on IDEAS
    26. Card, David, 2001. "Estimating the Return to Schooling: Progress on Some Persistent Econometric Problems," Econometrica, Econometric Society, vol. 69(5), pages 1127-1160, September.
    27. Conti, Gabriella, 2005. "Training, productivity and wages in Italy," Labour Economics, Elsevier, vol. 12(4), pages 557-576, August.
    28. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    29. van Ark, Bart, 1998. "Productivity," Journal of the Japanese and International Economies, Elsevier, vol. 12(2), pages 171-174, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Edquist, Harald & Henrekson, Magnus, 2017. "Swedish lessons: How important are ICT and R&D to economic growth?," Structural Change and Economic Dynamics, Elsevier, vol. 42(C), pages 1-12.
    2. Kevin J. Fox & Thomas Niebel & Mary O'Mahony & Marianne Saam, 2017. "The Contribution of Intangible Assets to Sectoral Productivity Growth in the EU," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63, pages 49-67, February.
    3. Crass, Dirk & Licht, Georg & Peters, Bettina, 2014. "Intangible assets and investments at the sector level: Empirical evidence for Germany," ZEW Discussion Papers 14-049, ZEW - Leibniz Centre for European Economic Research.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Carmichael, Fiona & Ercolani, Marco & Kang, Lili & Maimaiti, Yasheng & O'Mahony, Mary & Peng, Fei & Robinson, Catherine, 2009. "Training, education and productivity," MPRA Paper 39899, University Library of Munich, Germany.
    2. Kang, Lili & O'Mahony, Mary & Peng, Fei, 2012. "New Measures of Workforce Skills in the EU," National Institute Economic Review, National Institute of Economic and Social Research, vol. 220, pages 17-28, April.
    3. Kevin J. Fox & Thomas Niebel & Mary O'Mahony & Marianne Saam, 2017. "The Contribution of Intangible Assets to Sectoral Productivity Growth in the EU," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63, pages 49-67, February.
    4. Roth,Felix & Thum, Anna-Elisabeth, 2010. "Does intangible capital affect economic growth?," CEPS Papers 3667, Centre for European Policy Studies.
    5. Mary O’Mahony & Michela Vecchi & Francesco Venturini, 2021. "Capital Heterogeneity and the Decline of the Labour Share," Economica, London School of Economics and Political Science, vol. 88(350), pages 271-296, April.
    6. Qing Li & Long Hai Vo, 2021. "Intangible Capital and Innovation: An Empirical Analysis of Vietnamese Enterprises," Economics Discussion / Working Papers 21-02, The University of Western Australia, Department of Economics.
    7. Piva, Mariacristina & Santarelli, Enrico & Vivarelli, Marco, 2005. "The skill bias effect of technological and organisational change: Evidence and policy implications," Research Policy, Elsevier, vol. 34(2), pages 141-157, March.
    8. Carol Corrado & Jonathan Haskel & Cecilia Jona-Lasinio, 2017. "Knowledge Spillovers, ICT and Productivity Growth," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 79(4), pages 592-618, August.
    9. Angel de la Fuente & Antonio Ciccone, 2003. "Human capital in a global and knowledge-based economy," UFAE and IAE Working Papers 562.03, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    10. Lorraine Dearden & Howard Reed & John Van Reenen, 2006. "The Impact of Training on Productivity and Wages: Evidence from British Panel Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(4), pages 397-421, August.
    11. William Collier & Francis Green & Young-Bae Kim & John Peirson, 2011. "Education, Training and Economic Performance: Evidence from Establishment Survival Data," Journal of Labor Research, Springer, vol. 32(4), pages 336-361, December.
    12. Chen, Wen & Niebel, Thomas & Saam, Marianne, 2016. "Are intangibles more productive in ICT-intensive industries? Evidence from EU countries," Telecommunications Policy, Elsevier, vol. 40(5), pages 471-484.
    13. Carolina Hintzmann & Josep Lladós-Masllorens & Raul Ramos, 2021. "Intangible Assets and Labor Productivity Growth," Economies, MDPI, vol. 9(2), pages 1-21, May.
    14. Morikawa, Masayuki, 2021. "Employer-provided training and productivity: Evidence from a panel of Japanese Firms," Journal of the Japanese and International Economies, Elsevier, vol. 61(C).
    15. Federico Biagi, 2013. "ICT and Productivity: A Review of the Literature," JRC Working Papers on Digital Economy 2013-09, Joint Research Centre.
    16. Roth, Felix & Sen, Ali, 2021. "Intangible Capital and Labor Productivity Growth: Revisiting the Evidence," Hamburg Discussion Papers in International Economics 10, University of Hamburg, Department of Economics.
    17. Roth, Felix, 2022. "Intangible Capital and Labor Productivity Growth – Revisiting the Evidence: An Update," Hamburg Discussion Papers in International Economics 11, University of Hamburg, Department of Economics.
    18. Adel Ben Khalifa, 2019. "Direct and Complementary Effects of Investment in Knowledge-Based Economy on Innovation Performance in Tunisian Firms," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 10(2), pages 561-589, June.
    19. Cecilia Jona Lasinio & Stefano Manzocchi & Valentina Meliciani, 2017. "Knowledge Based Capital and Value Creation in Global Supply Chains," Working Papers LuissLab 17134, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    20. Arrighetti, Alessandro & Landini, Fabio & Lasagni, Andrea, 2014. "Intangible assets and firm heterogeneity: Evidence from Italy," Research Policy, Elsevier, vol. 43(1), pages 202-213.

    More about this item

    Keywords

    Training; Intangible Capital; EUKLEMS; EU LFS;
    All these keywords.

    JEL classification:

    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:38648. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.