IDEAS home Printed from https://ideas.repec.org/p/zbw/uhhhdp/16.html
   My bibliography  Save this paper

Is the EU ready for the next generation of investment? The case of France and Germany

Author

Listed:
  • Nonnis, Alberto
  • Roth, Felix
  • Bounfour, Ahmed

Abstract

This paper presents a puzzling finding: although France invests twice as much in intangible capital vis-à-vis Germany, both countries have similar LPG rates over the studied period from 1995 until 2020. We find that this difference in investments is driven by France's four- and two-and-a-half-fold investments in software and organizational capital. Our paper offers three perspectives to clarify the puzzle. First, higher investments in intangible capital in France might suggest a better readiness of the country towards the next generation of investment. However, France's investments in intangibles appear to be less efficient compared to those of Germany. Third, measurement problems in the software and organizational capital investment series are also to be considered to understand this major puzzle.

Suggested Citation

  • Nonnis, Alberto & Roth, Felix & Bounfour, Ahmed, 2024. "Is the EU ready for the next generation of investment? The case of France and Germany," Hamburg Discussion Papers in International Economics 16, University of Hamburg, Department of Economics.
    • Handle: RePEc:zbw:uhhhdp:16
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/298791/1/hdpie-no16.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Erik Brynjolfsson & Daniel Rock & Chad Syverson, 2021. "The Productivity J-Curve: How Intangibles Complement General Purpose Technologies," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(1), pages 333-372, January.
    2. Kim, Keungoui & Bounfour, Ahmed & Nonnis, Alberto & Özaygen, Altay, 2021. "Measuring ICT externalities and their contribution to productivity: A bilateral trade based approach," Telecommunications Policy, Elsevier, vol. 45(2).
    3. Stephen Bond & Anke Hoeffler & Jonathan Temple, 2001. "GMM Estimation of Empirical Growth Models," Economics Papers 2001-W21, Economics Group, Nuffield College, University of Oxford.
    4. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    5. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    6. Nonnis, Alberto & Bounfour, Ahmed & Kim, Keungoui, 2023. "Knowledge spillovers and intangible complementarities: Empirical case of European countries," Research Policy, Elsevier, vol. 52(1).
    7. Corrado, Carol & Haskel, Jonathan & Jona-Lasinio, Cecilia & Iommi, Massimiliano, 2016. "Intangible investment in the EU and US before and since the Great Recession and its contribution to productivity growth," EIB Working Papers 2016/08, European Investment Bank (EIB).
    8. Crouzet, Nicolas & Eberly, Janice, 2021. "Intangibles, markups, and the measurement of productivity growth," Journal of Monetary Economics, Elsevier, vol. 124(S), pages 92-109.
    9. Alberto Nonnis & Ahmed Bounfour & Altay Özaygen & Keung-Oui Kim & Tatiana Beliaeva, 2021. "The combined contribution of intangible capital and global value chain participation to productivity," Post-Print hal-03825282, HAL.
    10. Keung-Oui Kim & Ahmed Bounfour & Alberto Nonnis & Altay Özaygen, 2021. "Measuring ICT externalities and their contribution to productivity: a bilateral trade based approach," Post-Print hal-03825279, HAL.
    11. Miyagawa, Tsutomu & Tonogi, Konomi & Ishikawa, Takayuki, 2021. "Does the productivity J-curve exist in Japan?-Empirical studies based on the multiple q theory," Journal of the Japanese and International Economies, Elsevier, vol. 61(C).
    12. Stephen Bond & Anke Hoeffler, 2001. "GMM Estimation of Empirical Growth Models," Economics Series Working Papers 2001-W21, University of Oxford, Department of Economics.
    13. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    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. Bayraktar-Sağlam, Bahar & Yetkiner, Hakan, 2014. "A Romerian contribution to the empirics of economic growth," Journal of Policy Modeling, Elsevier, vol. 36(2), pages 257-272.
    2. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    3. Eftimoski, Dimitar, 2022. "On the inconclusive effect of human capital on growth: A new look at extended specifications," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 708-727.
    4. Martin Andersson & Hans Lööf, 2011. "Agglomeration and productivity: evidence from firm-level data," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 46(3), pages 601-620, June.
    5. Mirajul Haq & Muhammad Luqman, 2014. "The contribution of international trade to economic growth through human capital accumulation: Evidence from nine Asian countries," Cogent Economics & Finance, Taylor & Francis Journals, vol. 2(1), pages 1-13, December.
    6. Andrés Rodríguez-Pose & Marco Di Cataldo, 2015. "Quality of government and innovative performance in the regions of Europe," Journal of Economic Geography, Oxford University Press, vol. 15(4), pages 673-706.
    7. Bosch, Mariano & Lederman, Daniel & Maloney, William F., 2005. "Patenting and research and development : a global view," Policy Research Working Paper Series 3739, The World Bank.
    8. Alali, Walid Y., 2010. "Impact of Institutions and Policy on Economic Growth: Empirical Evidence," EconStor Preprints 269878, ZBW - Leibniz Information Centre for Economics.
    9. Alali, Walid Y., 2010. "Impact of Institutions and Policy on Economic Growth: Empirical Evidence," MPRA Paper 115610, University Library of Munich, Germany.
    10. Li, Hongbin & Yang, Zheyu & Yao, Xianguo & Zhang, Haifeng & Zhang, Junsen, 2012. "Entrepreneurship, private economy and growth: Evidence from China," China Economic Review, Elsevier, vol. 23(4), pages 948-961.
    11. Magrini, Stefano, 2004. "Regional (di)convergence," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 62, pages 2741-2796, Elsevier.
    12. Bianka Dettmer, 2012. "Business services outsourcing and economic growth: Evidence from a dynamic panel data approach," Jena Economics Research Papers 2012-049, Friedrich-Schiller-University Jena.
    13. Tânia Pinto & Aurora A. C. Teixeira, 2020. "The impact of research output on economic growth by fields of science: a dynamic panel data analysis, 1980–2016," Scientometrics, Springer;Akadémiai Kiadó, vol. 123(2), pages 945-978, May.
    14. Khaled Elmawazini, 2014. "FDI Spillovers, Efficiency Change and Host Country Labor Productivity: Evidence from GCC Countries," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 42(4), pages 399-411, December.
    15. Diana Alexa & Monica Pop-Silaghi & Laura Mariana Cismaṣ, 2016. "Total Factor Productivity, Health and Spatial Dependence in Some European Regions," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 58(3), pages 387-408, September.
    16. Carlos Morales, 2011. "Variedades de recursos naturales y crecimiento económico," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, December.
    17. Shrabani Saha & Kunal Sen, 2019. "The corruption-growth relationship: Do political institutions matter?," WIDER Working Paper Series wp-2019-65, World Institute for Development Economic Research (UNU-WIDER).
    18. James B. Ang & Jakob B. Madsen, 2012. "Risk capital, private credit, and innovative production," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 45(4), pages 1608-1639, November.
    19. Pop Silaghi, Monica Ioana & Alexa, Diana & Jude, Cristina & Litan, Cristian, 2014. "Do business and public sector research and development expenditures contribute to economic growth in Central and Eastern European Countries? A dynamic panel estimation," Economic Modelling, Elsevier, vol. 36(C), pages 108-119.
    20. Måns Söderbom & Francis Teal, 2003. "Openness and human capital as sources of productivity growth: An empirical investigation," CSAE Working Paper Series 2003-06, Centre for the Study of African Economies, University of Oxford.

    More about this item

    Keywords

    Intangible capital; Labour Productivity; Germany; France; EU;
    All these keywords.

    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:zbw:uhhhdp:16. 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: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/fwhamde.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.