Intangible capital and economic growth
empirical evidence from Luxembourg

Nikiema Kader Charlemagne and STATEC Luxembourg (Working paper 83/2015)

This paper is the first effort to analyze the role of intangible capital in contributing to GDP and labor productivity growth in Luxembourg from 1996 to 2012 using the definition and evaluation framework of intangibles from Corrado et al. (2005, 2012), which includes a broader range of assets than the classical national accounting system.

The annual average investment in intangible assets is about 2.4 billion euros in Luxembourg from 1995-2012 which represents 8.67 % of GDP and capital stock is estimated

to 10.1 billion euros in 2012. Compared to its neighbors (Belgium, France, Germany) and The Netherlands, Luxembourg invests more in intangible assets relatively to GDP. However the growth rate of intangible capital stock has been falling in Luxembourg while the trend of the accumulation in the neighboring countries is upwards. The growth accounting analysis suggests that the full capitalization of intangibles tends to increase GDP and labor productivity growth when the accumulation of intangible assets is speeding up, while a slowdown tends to affect adversely the growth rate of GDP and labor productivity in Luxembourg. But the growth impact of intangible capital is rather low in comparison to neighboring countries and The Netherlands.

Download Working Paper N° 83/june 2015 from STATEC Luxembourg PDF Download

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