Impact of Intangible Capital on Productivity and Growth: Lessons from the Indian Information Technology Software Industry

Supriyo de and Dilip Dutta

The Economic Record, 2007, vol. 83, issue s1, S73-S86

Abstract: This paper examines the impact of intangible capital, including human capital and organisational capabilities on productivity, using India as an illustrative example. The research breaks new ground in creating measures of intangible capital at a micro level. Measures of tangible and intangible capital are used to estimate a ‘new economy’ production function with panel data. Generalised method of moments techniques are used to account for unobserved firm heterogeneity and endogenous explanatory variables. The results indicate that intangible assets have a major impact on software sector output. This has important implications for public policy and corporate strategy towards the information technology industry, including for Australia.

Date: 2007
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https://doi.org/10.1111/j.1475-4932.2007.00406.x

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