Japan's Intangible Capital and Valuation of Corporations in a Neoclassical Framework

Hiroki Arato and Katsunori Yamada
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Katsunori Yamada: Osaka University

Review of Economic Dynamics, 2012, vol. 15, issue 4, 459-478

Abstract: This paper estimates the economic value in the 1980s and 1990s of corporate assets in Japan, including both tangible and intangible assets, based on the neoclassical framework of McGrattan and Prescott (2005). Our estimates use a new micro-data set that comprises the accounting statements of all listed, non-financial companies in Japan. We find that in 1980-86, a period that immediately preceded Japan's so-called ``bubble economy", our assessed value of corporate productive assets, net of the value of corporate debt, is approximately equal to the actual stock market value of Japanese corporate equity. The finding differs from previous results based on studies of aggregate data sets or based on studies of micro data sets that neglected intangible capital. We also show that the Japanese ratio of the amount of intangible capital stock to the amount of tangible capital stock is comparable to the analogous ratios for the U.S. and U.K. (Copyright: Elsevier)

Keywords: Intangible capital; Fundamental value of corporations; Accounting information (search for similar items in EconPapers)
JEL-codes: E01 E22 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (9)

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DOI: 10.1016/j.red.2012.01.001

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