Intangible Capital, Markups, and Markdowns: Evidence from Japanese Listed Firms

Kaoru Hosono and Yohei Yamamoto

No HIAS-E-162, Discussion paper series from Hitotsubashi Institute for Advanced Study, Hitotsubashi University

Abstract: This paper examines how intangible capital is related to firms' market power in product and labor markets using an unbalanced panel of Japanese listed firms from 1980 to 2024. We estimate firm-level markups and markdowns following the production-function approaches employed by the standard literature and then relate these measures to two types of intangible capital: R&D stock and organizational capital. The empirical results show that organizational capital is positively associated with markups and negatively associated with markdowns, while the role of R&D stock is relatively limited and less robust. These findings suggest that organizational capital may strengthen firms' product-market position while also encouraging rent sharing with workers. The stagnant accumulation of organizational capital may therefore help explain why Japan experienced weak price and wage growth since the 2000s.

Keywords: Intangible capital; markups; markdowns; organizational capital; labor market power; Japan (search for similar items in EconPapers)
JEL-codes: E22 J31 L11 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2026-08-07
New Economics Papers: this item is included in nep-com and nep-lma
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Persistent link: https://EconPapers.repec.org/RePEc:hit:hiasdp:hias-e-162

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