Rents and Intangible Capital: A Q+ Framework

Nicolas Crouzet and Janice Eberly

No 28988, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In recent years, US investment has been lackluster, despite rising valuations. Key explanations include growing rents and growing intangibles. We propose and estimate a framework to quantify their roles. The gap between valuations — reflected in average Q — and investment — reflected in marginal q — can be decomposed into three terms: the value of installed intangibles; rents generated by physical capital; and an interaction term, measuring rents generated by intangibles. The intangible-related terms contribute significantly to the gap, particularly in fast-growing sectors. Our findings suggest care in a pure-rents interpretation, given the rising role of intangibles.

JEL-codes: D25 D4 E22 G31 (search for similar items in EconPapers)
Date: 2021-07
New Economics Papers: this item is included in nep-cfn and nep-mac
Note: AP CF EFG
References: Add references at CitEc
Citations: View citations in EconPapers (11)

Published as NICOLAS CROUZET & JANICE EBERLY, 2023. "Rents and Intangible Capital: A Q+ Framework," The Journal of Finance, vol 78(4), pages 1873-1916.

Downloads: (external link)
http://www.nber.org/papers/w28988.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:nbr:nberwo:28988

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w28988

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().