Do intangibles contribute to productivity growth in East Asian countries? Evidence from Japan and Korea

초록

Introduction The information and communications technology (ICT) revolution in the 1990s and the productivity growth it caused in the United States have inspired new interest among economists in exploring sources of growth. Table 10.1 shows the standard growth accounting in Korea and Japan. In the manufacturing sector in both countries, total factor productivity (TFP) growth accelerated after 1995, while the contribution of capital to economic growth declined. This has led economists to look for new sources of economic growth. Hall (2000, 2001), Bresnahan, Brynjolfsson, and Hitt (2002), and Basu et al. (2003) emphasized intangible assets – that are complementary to ICT assets – and play a crucial role in productivity improvement. However, they had to indirectly estimate the role of intangible assets due to the challenges in measuring intangibles. Corrado, Hulten, and Sichel (2009) (hereafter referred to as CHS) overcame this challenge and measured intangible investment at the aggregate level in the US for the first time. Based on their estimation, they found that the ratio of intangible investment to gross domestic product (GDP) exceeded the ratio of tangible investment to GDP in the early 2000s. After their success in measuring intangible assets, many economists followed their method and estimated intangible investment in their own countries. One of the major contributions of CHS’s work was to show the contribution of intangibles (which have been hidden in the contributions of capital assets and TFP) to economic growth. CHS argued that one-third of the productivity growth in the late 1990s and the early 2000s is attributable to the growth in intangible assets, and the OECD (2013) emphasized that the effects of intangibles on productivity growth are greater than those of tangibles. The framework constructed by CHS has been developed further, mainly in two directions. One is to measure intangible investment by industry. Aggregated data does not provide enough detailed information to conduct a productivity analysis. As Jorgenson, Ho, and Stiroh (2005), Inklaar, O’Mahony and Timmer (2005), and Fukao et al. (2011) suggested, there is a significant productivity gap between ICT industries and non-ICT industries. In addition, even in ICT-intensive service industries, there is a productivity gap between the US and Japan. To understand the above gaps, we require intangible investment data at the industry level. Moreover, the aggregate series also constrains our analysis. © Cambridge University Press 2016.