Part of the series :
Description
This paper uses a new cross-country cross-industry dataset on investment in tangible and intangible assets for 18 European countries and the US. We set out a framework for measuring intangible investment and capital stocks and their effect on output, inputs and total factor productivity.
The analysis provides evidence on the diffusion of intangible investment across Europe and the US over the years 2000-2013 and offers growth accounting evidence before and after the Great Recession in 2008-2009.
Our major findings are the following.
First, tangible investment fell massively during the Great Recession and has hardly recovered, whereas intangible investment has been relatively resilient and recovered fast in the US but lagged behind in the EU.
Second, the sources of growth analysis including only national account intangibles (software, R&D, mineral exploration and artistic originals), suggest that capital deepening is the main driver of growth, with tangibles and intangibles accounting for 80% and 20% in the EU while both account for 50% in the US, over 2000-2013. Extending the asset boundary to the intangible assets not included in the national accounts (Corrado, Hulten and Sichel (2005)) makes capital deepening increases. The contribution of tangibles is reduced both in the EU and the US (60% and 40% respectively) while intangibles account for a larger share (40% in EU and 60% in the US).
Then, our analysis shows that since the Great Recession, the slowdown in labour productivity growth has been driven by a decline in TFP growth with relatively a minor role for tangible and intangible capital.
Finally, we document a significant correlation between stricter employment protection rules and less government investment in R&D, and a lower ratio of intangible to tangible investment.
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- EIB Working Paper 2022/13 - COVID-19 and the resilience of European firms
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- EIB Working Paper 2022/09 - Productivity and responses to the pandemic
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- EIB Working Paper 2022/07 - Corporate training and skill gaps
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- EIB Working Paper 2022/01 - Firm-level policy support during the crisis
- EIB Working Paper 2021/12 - Complementarities in capital formation and production
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- EIB Working Paper 2020/08 - EIB Group Survey on Investment and Investment Finance
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- EIB Working Papers 2018/08 - Debt Overhang and Investment Efficiency
- EIB Working Papers 2018/07 - Young SMEs: Driving Innovation in Europe?
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- EIB Working Papers 2016/01 – Infrastructure Investment in Europe and International Competitiveness
- EIB Working Papers 2015/01 – Competitiveness of the European economy
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