Intangible investments and productivity performance

Michele Cincera, Julie Delanote (), Pierre Mohnen, Anabela Santos () and Christoph Weiss

No 145, GEE Papers from Gabinete de Estratégia e Estudos, Ministério da Economia

Abstract: Companies in advanced economies are facing new challenges. Investment in intangible assets – such as R&D expenditures, ICT activities, the cost of training employees and spending on improving the organizational process – has gained relevance to overcome market pressure. In the last decade, many studies discussed the impact of intangible investment on firms’ performance. However, comparison of the effect of different types of intangible investments is less well explored. The paper aims to fill this gap by assessing the impact of several intangible investments on productivity using for the first-time data from the EIB Survey on Investment (EIBIS) covering all 28 EU members, in the period 2015-2017. We allow intangible investments to affect productivity through innovation, using an augmented version of the Crépon-Duguet-Mairesse (1998) model. Our results show that all types of intangible investments positively impact labour productivity. However, ICT and acquisition of new skills are more important for explaining productivity gains than R&D investment and organizational improvements. Furthermore, R&D and ICT investments also affect productivity indirectly through their effects on innovation, which itself increases productivity.

Keywords: R&D; ICT; Intangible investments; Innovation; Productivity (search for similar items in EconPapers)
JEL-codes: O30 O44 O52 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2020-03, Revised 2020-03
New Economics Papers: this item is included in nep-cse, nep-eff, nep-eur, nep-ict, nep-ino, nep-knm and nep-tid
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:mde:wpaper:0145

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