Abstract
The importance of intangible capital as a driver of productivity growth is recognised at both macroeconomic and microeconomic levels. However, in general, there is a lack of strong empirical evidence in the relevant literature on the connection between micro and macro approaches. This study integrates both perspectives to analyse how internal and external intangible capital influence the productivity of companies and, therefore, economic growth. A model is estimated in which the total factor productivity of companies is explained through their internal and external intangible capital. To this end, regional characteristics are considered in terms of technological endowment, human capital, and entrepreneurial capital. In addition, other agglomeration economies such as regional specialisation and regional productive diversity are also considered. In the empirical application, a panel of companies from the seventeen Spanish regions over the period 2006–2015 is used. The findings suggest that there is a positive effect of intangible capital on companies’ productivity and evidence of a spillover effect as a result of local intensities of intangibles.
Highlights
The importance of intangible capital as a driver of productivity growth is recognised both at a macroeconomic level (Corrado, Hulten, & Sichel, 2009; Corrado, Haskel, Jona-Lasinio, & Iommi, 2012; Goodridge, Haskel, & Wallis, 2017) and a microeconomic level (Piekkola, 2014; Marrocu, Paci, & Pontis, 2012; Riley & Robinson, 2011)
A model is estimated in which the total factor productivity of companies is explained through their internal and external intangible capital
There is evidence that the productivity of a company is positively related to its intangible capital
Summary
The importance of intangible capital as a driver of productivity growth is recognised both at a macroeconomic level (Corrado, Hulten, & Sichel, 2009; Corrado, Haskel, Jona-Lasinio, & Iommi, 2012; Goodridge, Haskel, & Wallis, 2017) and a microeconomic level (Piekkola, 2014; Marrocu, Paci, & Pontis, 2012; Riley & Robinson, 2011). In the macroeconomic or regional approach, several types of intangible capital, such as human, technological, and entrepreneurial capital, are considered for the effect they have on economic development. These effects are generally interpreted as externalities that positively influence the agglomeration of economic activities and economic results at a local level (Marrocu et al, 2012). Other studies that examine the effect of intangible capital within businesses do not generally consider the potential effect of the local external environment on business performance This research integrates both micro and macro perspectives to analyse how internal and external intangible capital influence the productivity of companies.
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