Abstract
An estimate of intangible capital stock is made for a sample of about 3,200 Indian corporate firms for 2012–2013, based on investments made by the firms in various intangible assets during the previous 10 years. For manufacturing and services firms of the sample, three alternate specifications of a production function are estimated in which intangible capital is taken as an input. This analysis clearly reveals that intangible capital has a significant positive impact on productivity of manufacturing and services firms in India. The rate of return to intangible capital is found to be much higher than that to tangible capital.
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