EconPapers    
Economics at your fingertips  
 

Can Intangible Investment Explain the UK Productivity Puzzle?

Peter Goodridge, Jonathan Haskel () and Gavin Wallis ()

National Institute Economic Review, 2013, vol. 224, issue 1, R48-R58

Abstract: This paper investigates whether intangibles might explain the UK productivity puzzle. We note that since the recession: (a) firms have upskilled faster than before; (b) intangible investment in R&D and software has risen whereas tangible investment has fallen; and (c) intangible and telecoms equipment investment slowed in advance of the recession. We have therefore tested to see if: (a) what looks like labour hoarding is actually firms keeping workers who are employed in creating intangible assets; and (b) the current slowdown in TFP growth is due to the spillover effects of the past slowdown in R&D and telecoms equipment investment. Our main findings are: (a) measured market sector real value added growth since the start of 2008 is understated by 1.6 per cent due to the omission of intangibles; and (b) 0.75 per cent per annum of the TFP growth slowdown can be accounted for by the slowdown in intangible and telecoms investment in the early 2000s. Taken together intangible investment can therefore account for around 5 percentage points of the 16 per cent productivity puzzle.

Keywords: Intangible investment; productivity (search for similar items in EconPapers)
JEL-codes: O47 E22 (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (24) Track citations by RSS feed

Downloads: (external link)
http://ner.sagepub.com/content/224/1/R48.abstract (text/html)

Related works:
Working Paper: Can intangible investment explain the UK productivity puzzle? (2013) Downloads
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:sae:niesru:v:224:y:2013:i:1:p:r48-r58

Access Statistics for this article

More articles in National Institute Economic Review from National Institute of Economic and Social Research Contact information at EDIRC.
Bibliographic data for series maintained by SAGE Publications ().

 
Page updated 2021-04-08
Handle: RePEc:sae:niesru:v:224:y:2013:i:1:p:r48-r58