Intangibles From Intangible Capital Work : Their Valuation and Technological Change

The paper explores the relationship between intangibles, technological change, and multifactor productivity (MFP) in four countries: Finland, Denmark, Norway, and Slovenia, between 2007 and 2019. An innovative approach using linked employer–employee data is employed to measure firm-level intangible assets within the areas of research and development (R&D), organizational capital (OC), and information and communication technology (ICT). Building on this, we introduce an Intangible-Biased Technological Change (IBTC) approach that measures the effective use and quality of R&D and organizational capital work. The results show that both intangibles and industry-specific IBTC contribute to higher MFP in the Nordic countries. IBTC is associated with growing productivity disparities among firms within the same industry. Nevertheless, we also find that R&D enhances absorptive capacity, leading to positive spillovers in inter-industry relationships, and that R&D-IBTC can also narrow differences in productivity between various industries.