Working Paper Series
Can Investment in Intangibles Explain the Swedish Productivity Boom in the 1990s?
Abstract: After a severe crisis in the early 1990s, the Swedish
economy experienced a boom in productivity growth. According to economists
there have been primarily three explanations for the fast productivity
growth in 1995–2004: Market reforms, recovery from the crisis and the
impact of information and communication technology (ICT). This paper offers
an alternative view by recognizing that firms make substantial investment
in intangible assets such as R&D, design, advertising etc. These
investments are not classified as investment in the National Accounts,
where only tangible assets are defined as investment. This paper provides
estimates of investment in intangible assets and uses the growth accounting
framework to analyze the Swedish productivity boom. The results show that
investment in intangibles was approximately 246 bn SEK in 2004 or 9 percent
of GDP. Moreover, intangible capital accounted for almost 50 percent of
labor productivity growth in the Swedish business sector 1995–2004. Thus,
investment in intangibles was an important source to the Swedish
productivity boom in 1995–2004.
Keywords: Intangibles; Investment; Economic growth; (follow links to similar papers)
JEL-Codes: O15; O16; O47; O52; (follow links to similar papers)
42 pages, September 23, 2009
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