Measurement of Intangible Investment by Industry and Economic Growth in Japan

Tsutomu Miyagawa and Shoichi Hisa
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Tsutomu Miyagawa: Gakushuin University and RIETI
Shoichi Hisa: Yokohama City University

Public Policy Review, 2013, vol. 9, issue 2, 405-432

Abstract: We measure intangible investment by industry in Japan based upon the JIP (Japan Industrial Productivity) database and other primary statistics. Expenditures on intangibles in Japan amounted to around 43 trillion yen, accounting for around 9% of GDP in the 2000s. The ratio of intangible investment to gross value added in the IT sector was higher than that in the non-IT sector. The total intangible capital stock in 2008 was worth 136 trillion yen, but the growth rate of intangible capital turned negative in some industries in the 2000s, as they underwent a drastic restructuring process. Growth accounting including intangible assets shows that intangible assets in the IT sector, which has led Japanese economic growth, are contributing to the growth of the economy. Our above results suggest that we should not unnecessarily cling to economic policy based on existing industry classifications, but draw up growth-promoting policies based upon new industry classifications.

Keywords: intangible investment; TFP; IT sector; Solow residuals (search for similar items in EconPapers)
JEL-codes: E01 E22 O31 O32 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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