The effect of physical and intangible capital on labour productivity: role of institutional and development factors

Valentin Lovric ()
Additional contact information
Valentin Lovric: Croatian National Bank, Zagreb, Hrvatska

Public Sector Economics, 2026, vol. 50, issue 2, 215-240

Abstract: Economists agree that physical and intangible capital can have a positive impact on productivity growth. However, the dependence of intangible capital on adequate institutions may lead to its weak impact on productivity in countries with weak institutions. The aim of this paper is to assess the link between investments in physical and intangible capital on the one hand and productivity on the other. For determining differences in the level of effect of physical and intangible capital on productivity depending on institutional and developmental characteristics of countries, the research is divided into two parts. First, we assessed regression models for Croatia, after which we used panel analysis to evaluate a number of models for highly developed countries with quality institutions. The results suggest a significant positive effect of physical and intangible capital in advanced economies, while in Croatia only physical capital has a significant impact.

Keywords: labour productivity; intangible capital; panel analysis; institutions; economic development (search for similar items in EconPapers)
JEL-codes: O31 O34 O43 O47 (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
http://pse-journal.hr/upload/files/pse/2026/2/lovric.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ipf:psejou:v:50:y:2026:i:2:p:215-240

DOI: 10.3326/pse.50.2.2

Access Statistics for this article

More articles in Public Sector Economics from Institute of Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Martina Fabris ().