Determinants of intangible capital investment in Vietnam: A firm‐level analysis

Abstract

Intangible capital is an important growth driver in the modern knowledge‐based and innovation‐driven economy. While there seems to be sufficient support for the role of intangible capital from developed economies, evidence from fast‐growing developing countries is much more limited. This paper explores the heterogeneous pattern and potential determinants of firm‐level intangible capital investment in Vietnam. We found that firm size, human capital, and information and communication technology increase the likelihood to invest in intangible capital. Additionally, an inverted‐U shaped relation is identified between market competition and intangible capital investment: Moderate levels of market competition induce firms in Vietnam to invest more in innovative activities, but the effect of stronger competition diminishes.