Are intangibles more productive in ICT-intensive industries? Evidence from EU countries

There is much firm-level evidence that maximising productivity benefits from investments in information and communication technologies (ICT) requires complementary investments in organisational structures, employee training, and other intangible assets. Yet convincing macro-level analysis to quantify the importance of this effect was not possible until industry-level data on investment in intangibles were developed. With such data now available for 10 European countries, this research shows that the output elasticity of intangible capital is stronger in more ICT-intensive industries. This suggests that intangible capital and ICT capital are complements in production.