The impact of intangible assets on productivity growth in the Norwegian economy: Evidence from firm-level data (D5.1)

This paper examines the contribution of intangible assets (IA) to aggregate productivity growth using a new decomposition method that is based on the economic approach to index numbers, based on weighted averages of labor productivity growth.

The decomposition of productivity growth can be used to quantify the contributions to productivity growth from different industries and types of firms according to the intensity of their IA-related activities, such as investments in R&D, ICT software and human capital. The approach combines different numerical measures related to IA into qualitative (ordered) classifications of firms’ intangible investments and innovative efforts.

Concentrating on two broad industry aggregates: three R&D-intensive industries and the Mainland market industries, the paper finds that IA-active firms are an important driver of productivity growth in Norway, but that it is not necessarily increased IA-intensity per se that drives productivity growth, but rather the complementarity between different types of intangible assets, such as human skills combined with R&D- or ICT-capital.

Read the paper here.