Total Factor Productivity and Intangible Capital in Different Levels of Technology: A Case Study of Iranian Manufacturing Industries

Document Type : Original Article

Authors

1 Ph.D Candidate of Economics, Faculty of Economics, Allameh Tabatabai University, Tehran, Iran

2 Associate Professor, Faculty of Economics, Allameh Tabatabai University, Tehran, Iran

Abstract

This article tries to examine intangible investment in different levels of Iranian industrial technology by using a comprehensive measure of intangible capital costs in Iran. Previous studies in the study of intangible capital on total factor productivity (TFP), show that intangible investment has a positive and significant effect on this variable in Iran's manufacturing industry with a four-digit ISIC code. Also among the components, Information and Communication Technology (ICT) has a more prominent role on the TFP variable. This study examines all the factors (which play a role in measuring intangible investment) on the growth of TFP at different levels of technology (which are divided into four categories).Unlike previous studies, for all industries, apart from technology levels, ICT is very effective and other components are ignored,the results of this study show that other factors affect intangible investment except ICT in high-tech and medium / high industries have higher impact on TFP than ICT and vice versa. It is also suggested to achieve the highest optimal level of TFP, by separating different levels of technology, to focus on components such as research and development, brand, educational services, etc. for high levels and ICT factor for low levels.

Keywords

References

Arellano, M., & Bond, S. (1991). Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations. The Review of Economic Studies, 58(2): 277–297.
Van Ark, B., O’ Mahony, M., & Timmer, M. P. (2008). The Productivity Gap between Europe and the United States: Trends and Causes. Journal of Economic Perspectives, 221: 25–44.
Balli, H. O., & Sørensen, B. E. (2013). Interaction effects in econometrics. Empirical Economics, 45(1): 583–603.
Bhattacharya, P., & Badri Narayan, R. (2020).Innovation and Firm-level Labor Productivity: A Comparison of Chinese and Indian Manufacturing Based on Enterprise Surveys. Science, Technology & Society, 25 (3): 465-481.
Blundell, R., & Bond, S. (1998) Initial Conditions and Moment Restrictions in Dynamic Panel Data Models. Journal of Econometrics, 87(1): 115-143.
Corrado, C., Hulten, Ch., & Sichel, D. (2009). Intangible capital and U.S. economic growth. Review of Income and Wealth, 55(3), 661-685.
---------- (2005). Measuring capital and technology: an expanded framework. Chicago: University of Chicago Press.
Corrado, C., Haskel, J., & Iommi (2012). Intangible Capital and Growth in Advanced Economies: Measurement Methods and Comparative Results. ZA Discussion Papers, Institute for the Study of Labor IZA, Retrieved from https://www.econstor.eu/bitstream/10419/62563/1/720473268.
Corrado, C., Haskel, J., & Jona-Lasinio, C. (2021). Artificial Intelligence and productivity: an intangible assets approach. Oxford Review of Economic Policy, Retrieved from      https://spiral.imperial.ac.uk/handle/10044/1/89036.
---------- (2014). Intangibles and Industry Productivity Growth: Evidence from the EU. IARIW 33rd General Conference Rotterdam, the Netherlands, Retrieved fromhttp://old.iariw.org/papers/2014/LasinioPaper.
Diewert, W. E. (1993). The early history of price index research Chapter 2 of Essays in Index Number Theory (I). In W. E. Diewert and A. O. Nakamura (Eds.), Retrieved from
http://is.muni.cz
Divisia, F. (1926). The Monetary Index and The Theory of Money. "Review of econ. Polit, 1, 49-81.(In French)
Divisia, F.(1925). The monetary index and the theory of money. Review of econ. Polit, XXXIX, 1121-1151. (In French)
EamaeilySadrabadi F., Jahangard E., Mohammadi T.,& Salem AA.(2021). The effect of intangible capital on the total factor productivity of production in Iran's manufacturing industries. Quarterly Journal of Quantitative Economics. Accepted Manuscript Available Online from 25 July 2021.
Hintzmann, C., Masllorens, L., & Ramos Lobo, R. (2021). Intangible Assets and Labor Productivity Growth. MDPI, Retrieved from
http://diposit.ub.edu/dspace/bitstream/2445/177614/1/712300.pdf
Haskel, J., & Westlake, S. (2017) .Capitalism without Capital: The Rise of the Intangible Economy. Princeton: Princeton University Press.
Jahangard E., Mohammadi T.,Salem AA., EsmaeilySadrabadi F.(2021). Intangible Capital in Industries with Higher Digital Technology Intensity and Total Factor Productivity. Iranian Journal of Economic Research.
Jorgenson. D. W., & Timmer, M. P. (2011). Structural change in advanced nations: A new set of stylized facts.  Scandinavian Journal of Economics, 113(1): 1–29.
Keungoui K., Bounfour A., Nonnis A.,  & Özaygen, A. (2021). Measuring ICT externalities and their contribution to productivity: A bilateral trade based approach. Telecommunications Policy, 45(2).
Meinen, G., Verbiest P., & Wolf, P. (1998). Perpetual Inventory Method. Statistics Netherlands, Department of National Accounts.
Lall, S. (1992).Technological Capabilities and Industrialization. World Development, 20(2): 165- 186.
Lefophane, M. H., & Kalaba, M. (2021). Estimating effects of ICT intensity on productivity, employment and output in South Africa: an industry-level analysis. Information Technology for Development.
Liang, Y. )2021(. Intangible capital in U.S. manufacturing, Economics Letters, 199: 109-697.
OECD. (2011). Technology Intensity Definition. Classification of Manufacturing Industries into Categories Based on R&D Intensities. Retrieved from http://www.oecd.org/sti/ind/48350231.
O’Mahony, M., & Timmer. M. P. (2009). Output, Input and productivity measures at the industry level: the EU KLEMS database. Economic Journal, 119(538): 374–403.
Rajan, R., & Zingales, L. (1998). Financial dependence and growth. American Economic Review, 88(3): 559–586.
Rico, P., & Cabrer-Borrás, B. (2020). Intangible capital and business productivity. Economic Research, 33: 3034-3048.
Roodman, D. (2009). How to do Xtabond2: An Introduction to Difference and System GMM in Stata. The Stata Journal, 9(1): 86-136.
Schreyer, P., & Pilat, D. (2001). Measuring productivity. OECD Economic Studies. 33: 127–165.
Schultz, E. L., Tan, D. T., & Walsh, K. D. (2010).Endogeneity and the corporate governance - performance relation. Australian Journal of Management, 35(2): 145-163.
Stiroh, K. J. (2002). Information technology and the U.S. productivity revival: What do the industry data say? American Economic Review. 92 (5): 1559–1576.
 Sawng, Y., Kim, P., & Park, J. (2021). ICT capital and GDP growth: Causality analysis for the case of Korea. Telecommunications Policy, 45(7): 102-157.
Soltanisehat, L., Alizadeh, R., & Mehregan, N. (2019). Research and Development Capital and Productivity Growth in Firms with Different Levels of Technology. Iranian Economic Review, 23(4): 795-818.
Wintoki, M. B., Linck, J. S., & Netter. J. M. (2012). Endogeneity and the dynamics of internal corporate governance. Journal of Financial Economics, 105)3(: 581-606.
 
International Journal of New Political Economy
Volume 3, Issue 2
October 2022
Pages 27-50

Files

History

  • Receive Date: 08 February 2022
  • Revise Date: 02 May 2022
  • Accept Date: 09 May 2022
  • First Publish Date: 09 May 2022

Share

How to cite

Statistics