The Labor Demand Implications of Brand Capital: Evidence from Trademark Transactions

Jaime Arellano-Bover (), Carolina Bussotti (), Matteo Paradisi () and Liangjie Wu ()
Additional contact information
Jaime Arellano-Bover: Yale University
Carolina Bussotti: Rome Economics Doctorate
Matteo Paradisi: EIEF
Liangjie Wu: EIEF

No 18461, IZA Discussion Papers from IZA Network @ LISER

Abstract: Brand capital--an intangible asset that differentiates a firm's products--has grown in recent decades, alongside the rise of intangible investment and the decline in the labor share. Trademarks are legal claims on brand capital and are traded across firms, providing a setting to study how reallocating brand capital reshapes firm behavior and aggregate outcomes. Leveraging a novel link of Italian administrative data on trademark ownership, firms' financial statements, and employer–employee records, we exploit firm-to-firm trademark transactions to identify the effects of brand-capital investment. Guided by a model in which firms combine production and expansionary with brand capital, we use an event-study design to estimate firm-level and aggregate effects. Acquiring a trademark increases intangible assets by 19%, sales by 8%, and employment by 6%, while leaving weekly earnings unchanged and reducing the firm-level labor share. Employment gains are concentrated among marketing and sales workers. Trademark transactions reallocate brand capital toward larger firms, raising combined buyer-seller sales. Calibrating the model, we find this reallocation generates a one percentage-point long-run decline in the aggregate labor share.

Keywords: brand capital; trademarks; labor share; labor demand; markups (search for similar items in EconPapers)
JEL-codes: E25 J23 L25 O34 (search for similar items in EconPapers)
Date: 2026-03
New Economics Papers: this item is included in nep-lma and nep-mac
References: Add references at CitEc
Citations:

Downloads: (external link)
https://docs.iza.org/dp18461.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:iza:izadps:dp18461

Access Statistics for this paper

More papers in IZA Discussion Papers from IZA Network @ LISER Contact information at EDIRC.
Bibliographic data for series maintained by Mark Fallak ().