Intangible Investment and Firm Performance
- 215 Downloads
We combine survey and administrative data for about 13,000 New Zealand firms from 2005 to 2013 to study intangible investment and firm performance. We find that firm size and moderate competition is associated with higher intangible investment, while firm age is associated with lower intangible investment. Examining firm performance, we find that higher investment is associated with higher labour and capital input, higher revenue, and higher firm-reported employee and customer satisfaction, but not with higher productivity or profitability. The evidence suggests that intangible investment is associated with growth and ‘soft’ performance objectives, but not with productivity or profitability.
KeywordsFirm performance Industrial policy Intangible investment Productivity
JEL ClassificationD22 D24 L21
This research is partially funded by the Productivity Hub under the Productivity Partnership programme, and by Queensland University of Technology. We would like to thank Lawrence J. White and an anonymous referee for valuable feedback. We also thank participants at an internal Motu seminar, as well as participants at a Productivity Commission of New Zealand workshop for helpful comments.
- Aghion, P., Bloom, N., Blundell, R., Griffith, R., & Howitt, P. (2002). Competition and innovation: An inverted U relationship (Working Paper No. 9269). National Bureau of Economic Research.Google Scholar
- Andrews, D., Criscuolo, C., & Menon, C. (2014). Do resources flow to patenting firms? (OECD Economics Department Working Papers). Paris: Organisation for Economic Co-operation and Development.Google Scholar
- Andrews, D., & de Serres, A. (2012). Intangible assets, resource allocation and growth (OECD Economics Department Working Papers). Paris: Organisation for Economic Co-operation and Development.Google Scholar
- Corrado, C., Hulten, C., & Sichel, D. (2005). Measuring capital and technology: An expanded framework. In Measuring capital in the new economy (pp. 11–46). University of Chicago Press.Google Scholar
- Corrado, C. A., Haskel, J., Iommi, M., & Jona Lasinio, C. (2012). Intangible capital and growth in advanced economies: Measurement and comparative results. Discussion Paper No. 6733, Institute for the Study of Labour (IZA), Bonn.Google Scholar
- Crass, D., & Peters, B. (2014). Intangible assets and firm-level productivity. Centre for European Research Discussion Paper No. 14-120.Google Scholar
- Fabling, R. (2011). Keeping it together: Tracking firms on New Zealand’s longitudinal business database. Motu Economic and Public Policy Research Working Papers 11_01.Google Scholar
- Fabling, R., & Maré, D. C. (2015a). Production function estimation using New Zealand’s longitudinal business database. Motu Economic and Public Policy Research Working Papers 15_15.Google Scholar
- Fabling, R., & Maré, D. C. (2015b). Addressing the absence of hours information in linked employer-employee data. Motu Economic and Public Policy Research Working Papers 15_17.Google Scholar
- Fabling, R., & Sanderson, L. (2016.). A rough guide to New Zealand’s longitudinal business database, 2nd edn. Motu Economic and Public Policy Research Working Papers 16_03.Google Scholar
- Lin, H. L., & Lo, M. L. (2015). The portfolio of intangible investments and their performance: Evidence from Taiwanese Manufacturing Firms. Unpublished manuscript. Retrieved from http://homepage.ntu.edu.tw/~josephw/20151112_Intangible20151106v1.pdf.
- Maré, D. C. (2016). Urban productivity estimation with heterogeneous prices and labour. Motu Economic and Public Policy Research Working Papers 16_21.Google Scholar
- Machado, J. A. F., Parente, P. M., & Silva, J. S. (2015). QREG2: Stata module to perform quantile regression with robust and clustered standard errors. Statistical Software Components.Google Scholar
- Montresor, S., & Vezzani, A. (2016). Intangible investments and innovation propensity: Evidence from the Innobarometer 2013. Industry and Innovation, 1–22.Google Scholar
- Pakes, A., & Griliches, Z. (1984). Patents and R&D at the firm level: A first look. In Z. Griliches (Ed.), R&D, patents, and productivity (ch. 3). Chicago: University of Chicago Press.Google Scholar
- Scherer, F. M. (1986). Innovation and growth: Schumpeterian perspectives. MIT Press Books, Cambridge 1.Google Scholar