Innovation and intangible investment in Europe, Japan, and the United States

Corrado, Carol; Haskel, Jonathan; Jona-Lasinio, Cecilia; Iommi, Massimiliano

doi:10.1093/oxrep/grt017

Cited by 116 publications

(108 citation statements)

References 15 publications

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“…This value is consistent with the depreciation rates used for the perpetual inventory method in Section 2. 21 The initial endowment of newborn …rms W 0 is equal to 5, and is the only one not to be calibrated to match a speci…c moment due to a lack of a clear empirical counterpart. It corresponds to 2% of average …rm annual output.…”

Section: Discussionmentioning

confidence: 99%

Capital Misallocation and Secular Stagnation

Caggese

Perez-Orive

2017

FEDS

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The widespread emergence of intangible technologies in recent decades may have signi…-cantly hurt output growth-even when these technologies replaced considerably less productive tangible technologies-because of structurally low interest rates caused by demographic forces.This insight is obtained in a model in which intangible capital cannot attract external …nance, …rms are credit constrained, and there is substantial dispersion in productivity. In a tangiblesintense economy with highly leveraged …rms, low rates enable more borrowing and faster debt repayment, reduce misallocation, and increase aggregate output. An increase in the share of intangible capital in production reduces the borrowing capacity and increases the cash holdings of the corporate sector, which switches from being a net borrower to a net saver. In this intangibles-intense economy, the ability of …rms to purchase intangible capital using retained earnings is impaired by low interest rates, because low rates increase the price of capital and slow down the accumulation of corporate savings.

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Section: Discussionmentioning

confidence: 99%

Capital Misallocation and Secular Stagnation

Caggese

Perez-Orive

2017

FEDS

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“…As the raw material for ICT is data, substantial investment in ancillary, non-tangible assets is required for this effect to fully unfold. For instance, Corrado et al (2013) show that Europe invests much less in such digital assets than the US and the combination with lower propensity to invest in ICT leads to a less effective exploitation of ICT (Van Ark et al, 2008) and hence lower growth performance.…”

Section: The Role Of Digital Technologiesmentioning

confidence: 99%

Innovation, skills and investment: a digital industrial policy for Europe

Gruber

2017

Econ Polit Ind

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractThis paper identifies the main factors for Europe's delays in embracing the well proven growth enhancing effects of digital technologies. It argues that market failures, including externalities from knowledge spillovers, cybersecurity and first mover advantages justify public support. The whole value added chain of digital production is entailed, starting with infrastructure investment and R&D relevant for digital sectors, along with qualified skills of researchers and of workers, coming to skill sets provided by the education sector. Emphasis is put on the efficient leverage effects that can be achieved by combining public and private sector funds through financial instruments.

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“…Most of the evidence belongs to developed countries (Corrado et al 2013). To consider the effect of ICT on productivity, the positive effect of computer networks is found (Atrostic & Nguyen, 2005).…”

Section: Software Investmentmentioning

confidence: 99%

“…In recent years, the share of investment in intangible assets of the firms in manufacturing industries increased in most of the EU countries while the share of investment in tangible capital has decreased (Corrado,Haskel, Jona-Lasinio & Iommi, 2013). Intangible investment is defined as "the claims on future benefits that do not have a physical or financial embodiment" (Lev,2000).…”

Section: Introductionmentioning

confidence: 99%