Impact of Intangible Capital on Productivity and Growth: Lessons from the Indian Information Technology Software Industry*

This paper examines the impact of intangible capital, including human capital and organisational capabilities on productivity, using India as an illustrative example. The research breaks new ground in creating measures of intangible capital at a micro level. Measures of tangible and intangible capital are used to estimate a ‘new economy’ production function with panel data. Generalised method of moments techniques are used to account for unobserved firm heterogeneity and endogenous explanatory variables. The results indicate that intangible assets have a major impact on software sector output. This has important implications for public policy and corporate strategy towards the information technology industry, including for Australia.     

The Economic Growth with the Flows of Capital ＆ Technology

The difference of regional economy comes from capital dissymmetry, technology dissymmetry, manpower dissymmetry and the information dissymmetry. In the knowledge-based economic ages, globalization and information exceed any age of the history. It provides the new terrace for the balanced development of global economy. The flows of capital and technology improve the regional dissymmetry of production factor. By establishing circulating channels, the flows of the production factor will be enlarged. This will raise the distribution efficiency of global resources and lead to the global economic growth.     

Computers And Growth

The purpose of this paper is to describe the impact of investment in computers on the growth of the U.S. economy. The economic literature on computers is relatively rich in information on the decline in computer prices and the growth of computer investment. Constant quality price indices for computers have been included in the U.S. National Income and Product Accounts (NIPA) since 1986. These indices employ state of the art methodology to capture the rapid evolution of computer technology.

While the annual inflation rate for overall investment has been 3.66 percent for the period 1958 to 1992, computer prices have declined by 19.13 percent per year! Similarly, overall investment grew at 3.82 percent, while investment in computers increased at an astounding 44.34 percent! These familiar facts describe growth in the output of computers. The objective of this paper is to complete the picture by analyzing the growth of computer services as inputs.

In a pioneering paper Bresnahan (1986) has focused on pecuniary externalities arising from the rapid decline in computer prices. Griliches (1992, 1994) has emphasized the distinction between pecuniary and nonpecuniary externalities in the impact of computer investment on growth. This paper is limited to pecuniary externalities or the impact of reductions in computer prices on the substitution of computer services for other inputs. As Griliches (1992) points out, this is an essential first step in identifying nonpecuniary externalities or ‘spill-overs’ through the impact of a decline in computer prices on productivity growth. ^{* *}Brynjolfsson (1993) has proveded a detailed survey of studies of nonpecuniary externalities or ‘spill overs’. Recent studies include those of Brynjolfsson and Hitt (1994a, 1994b) and Lichtenberg (1993).

In two important papers Stephen D. Oliner (1993, 1994) has introduced a model of computer technology that greatly facilitates the measurement of computer services as inputs. In this paper we estimate computer stocks and flows of computer services for all forms of computer investment included in NIPA. We construct estimates of computer services parallel to NIPA data on computer investment by combining these data with information on computer inventories. For example, the International Data Corporation (IDC) Census of Computer Processors includes an annual inventory of processors in the U.S.

In Section 1 we present data on investment in computers and constant quality price indices from NIPA. These data incorporate important innovations in modeling computer technology stemming from a joint study by IBM and the Bureau of Economic Analysis (BEA) completed in 1985. This study utilized a ‘hedonic’ methodology for constructing an econometric model of computer prices that accurately reflects rapid changes in computer technology. This methodology generates an index of computer prices that holds the quality of computers constant.

In Section 2 we present the model of computer services originated by Oliner (1993,1994). This differs in important respects from the model of capital services used in the previous studies of U.S. economic growth surveyed by Jorgenson (1989,1990). The model employed in previous studies is based on the decline in productive capacity with the chronological age of a capital good. Oliner assumes that computers maintain their productive capacity until they are retired. Decline in productive capacity occurs only through removal of used computers from the inventory through retirement.

In Section 3 we construct estimates of stocks of computers that incorporate IDC data on computer inventories and derive the implied flow of computer services. While output of computer investments has grown very rapidly, the input of computer services has grown even faster. The price of these services has declined at 23.22 percent per year over the period 1958 to 1992, while the input of these services has grown at 52.82 percent! This is prima facie evidence of an important role for computer price declines as a source of pecuniary externalities.

In Section 4 we combine computer services with the services of other types of capital to produce a measure of capital input into the U.S. economy. We link this with labor input to obtain the contributions of both inputs to U.S. economic growth, arriving at the growth of productivity as a residual. We find that the contribution of computer services to input into the U.S. economy is far more important than the contribution of computer investments to output. This is a significant step toward resolution of the Solow paradox: ‘We see computers everywhere except in the productivity statistics. ^{* *}Robert M. Solow, quoted by Brynjolfsson (1993). Declines in computer prices generate very sizable pecuniary externalities through the substitution of computer services for other inputs. By contrast Solow focuses on nonpecuniary externalities that would appear as productivity growth.

In Section 5 we conclude that information on inventories of computers is critical in quantifying the role of computer services as inputs. The constant quality price indices for computers incorporated into NIPA are also essential. A price index for computers that reflects only general trends in inflation would result in a highly distorted perspective on the growth of GDP and capital services, especially during the past decade. To capture the contribution of all forms of investment to U.S. economic growth, similar price indices should be included in NIPA for capital goods with rapidly evolving technologies, as proposed by Gordon (1990).

The long term goal should be a unified system of income. product, and wealth accounts, like that proposed by Laurits Christensen and Jorgenson (1973) and Jorgenson (1980). This incorporates capital stocks, capital services, and their prices. Achieving this goal will necessitate much greater elaboration of the accounting system described in Section 3. These accounts would incorporate data on prices and quantities of investment, stocks of assets, and capital services for all forms of capital employed in the U.S. economy.     

Why Do the Rich Save More? A Theory and Australian Evidence*

We provide a theory to explain the existence of inequality in an economy where agents have identical preferences and have access to the same production technology. Agents consume a ‘health’ good which determines their subjective discount factor. Depending on initial distribution of capital the economy gets separated into different permanent‐income groups. This leads to a testable hypothesis: ‘The rich save a larger proportion of their permanent‐income’. We test this implication for savings behaviour in Australia. We find that even after controlling for lifecycle and health characteristics, higher permanent income is positively related with higher savings rates and better saving habits.     

Money power of Capital and Production of ‘New State Spaces’: A View from the Global South

An array of innovative financial and monetary institutional and policy initiatives recently emerged across the Global South at various spatial scales: (1) the deployment of national ‘self-insurance’ strategies such as large foreign reserve accumulation, different forms of capital controls, and currency market interventions; (2) the multiplication of bilateral, sub-regional, and regional financial and monetary mechanisms, including currency swaps and reserve-pooling arrangements, credit lines, bilateral aid, and development finance; and (3) a growing participation and assertiveness in multilateral financial arrangements. After critically reviewing the existing literatures – the international political economy (IPE) of ‘policy space’ and the IPE of ‘financial statecraft’ – the paper deploys a ‘scalar-relational’ critical IPE approach and interprets these policy initiatives in terms of a crisis-driven production of ‘new state spaces’ across the Global South, in the context of the current period of credit-led capital accumulation. The paper argues that this process has been characterised by the contradictory extension, intensification and growing complexity of the tasks taken on by the capitalist state at various scale levels, resulting in the increasing entanglement of state power in the nested hierarchy of monetary relations, from the global scale to bodies and subjectivities.     

互联网经济、制度与创新价值链* ——基于人力资本与制度发展指数的测度分析

随着互联网经济的飞速发展，信息交流更为便捷、交易成本不断下降。基于高技术含量的互联网产业体系不断演进，熨平了信息流传播的阻隔和落差。同时，基于知识体系交叉衍生出新产业、新业态，推动中国经济质量的提升与效能的增加，推动中国向全球创新价值链的高附加值阶段攀升。在互联网经济蓬勃发展的进程中，人力资本和制度的软环境因素发挥着重要的作用。高质量的人力资本储备和良性的制度环境有助于互联网经济发展，推动平台战略、产业公地和产业森林的形成和优化。本文将分析互联网经济发展的区域差异、影响因子和决定因素，通过基于人力资本弹性和制度发展指数弹性的测度和分析，阐述互联网经济发展的内生动力，探寻促进互联网经济发展的着力点和政策建议。     

Stock market returns in an emerging financial market: Turkish case study

We design a conceptual framework for linking two approaches: absorptive capacity and spatial Knowledge Spillovers (KSs). Regions produce new knowledge, but only part of it is efficiently adopted in the economy; the share of efficiently adopted technology depends on cognitive capital. Our dataset is based on a panel of European regions over the period 1999 to 2006, combining data from EUROSTAT and the European Values Study (EVS). We test the hypothesis that insufficient levels of cognitive capital hamper the capability of regions to fully exploit new knowledge. Results show that a lower regional absorptive capacity increases KS towards surrounding areas, hampering the regions’ capability to decode and efficiently exploit new knowledge, both locally produced and originating from outside.     

人力资本、财务资本与资本结构：理论和实证

当今社会已经从工业经济迈进知识经济时代，现有以财务资本为研究对象的资本结构理论在解释咨询、高新技术等人力资本较为密集的公司时难免会捉襟见肘。视企业为财务资本与人力资本共同的投资组合是现代资本结构理论研究刻不容缓的任务。本文以现有财务资本结构的研究为基础，通过引入人力资本变量拓宽现代资本结构的内涵，构造债务、股权和人力资本三者之间相互关系和作用的数理模型，结合对我国计算机应用服务业的实证分析，得出结论和启示。     

A general equilibrium analysis of property tax incidence

Mieszkowski's (1972) analysis of the ‘new view’ of property tax incidence dealt with a model of an economy containing only one sector and three factors, in which labor was immobile. Brueckner (1981) incorporated an equal utility condition into his general equilibrium analysis of property tax incidence to take worker mobility into account. His model, however, did not have capital as an input factor and the benefits of public expenditure were ignored. This paper extends previous research by using a general equilibrium model of an economy with two sectors, three factors, and multiple communities. Both capital and labor are assumed to be mobile and Brueckner's labor mobility condition is modified to include public expenditure effects. While the results of the analysis support the ‘new view’, they qualify the original Mieszkowski studies in many aspects. The model also sheds light on tax incidence in no-tax communities, which was often ignored in earlier studies.     

Governance as ‘Kicking Away the Ladder'

The label ‘poor governance’ throws together real evils such as corruption and rent-seeking with a new group of alleged evils which are actually good for development, including a role for the state in the economy and support for domestic capital. Successful development policies of Europe in the late nineteenth century and the Asian Tigers and Brazil in the second half of the twentieth century are now labelled as ‘poor governance.’ This is what Ha-Joon Chang described as ‘kicking away the ladder’ by which rich countries climbed to development, so that today’s poor countries cannot follow. Mozambique is cited as an example of how the good governance rhetoric has been misused to retard development and poverty reduction.     

Robots and us: towards an economics of the ‘Good Life’

(Expected) adverse effects of the ‘ICT Revolution’ on work and opportunities for individuals to use and develop their capacities give a new impetus to the debate on the societal implications of technology and raise questions regarding the ‘responsibility’ of research and innovation (RRI) and the possibility of achieving ‘inclusive and sustainable society’. However, missing in this debate is an examination of a possible conflict between the quest for ‘inclusive and sustainable society’ and conventional economic principles guiding capital allocation (including the funding of research and innovation). We propose that such conflict can be resolved by re-examining the nature and purpose of capital, and by recognising mainstream economics’ utilitarian foundations as an unduly restrictive subset of a wider Aristotelian understanding of choice.     

Economic transition,gender bias,and the distribution of earnings in China*

Market‐oriented economic reform, which accelerated after 1992, has brought substantial changes to the Chinese economy. This dramatic economic transition was raised two important questions: ‘How are women faring in the transition from a planned economy to a market economy?’ and ‘Are some women faring relatively better than other women’? We use data from the Chinese Household Income Projects for the years 1988 and 1995, a standard earnings equation, and quantile regressions to estimate and decompose the earnings gap. Our findings suggest that while the earnings gap has increased, the fraction of the gap ‘unexplained’ by differences in human capital variables such as education and experience has declined over time. This result is particularly pronounced for low earning women.     

Investment-based optimal capital structure

This paper extends the classical capital structure model by introducing the output of firm with ‘AK’ production technology dynamically depends on the endogenous investment decision and capital accumulation. Based on our calibration, it shows that the flexibility of dynamic investment and capital accumulation induces the firm to take the lower leverage at financing time and makes the leverage estimate closer to empirically observed leverage ratios, which provides an effective explanation for the ‘under-leverage puzzle’. In addition, this model predicts that the market leverage behaves in a U-shaped manner with capital liquidity, which provides a novel empirical test.     

Local banking and local economic growth in Italy: some panel evidence

This article provides new evidence on the contribution of local banking to local economic growth (i.e. at county level – the Italian ‘province’) in Italy. A comprehensive data set is used, which includes control variables for social capital and human capital as well as indicators of the quality of local infrastructures and the production structure of the local economy. A linear within-estimator technique with fixed effects is applied to a modified version of the so-called Barro regression in order to address the well-known econometric issues of reverse causality and estimation bias resulting from unobserved district-specific influences.     

Government policy to reduce pollution emissions within the overlapping generations model

This article develops an overlapping generations model with multiple categories of capital. The importance of this article is in its ability to analyse changes in the distribution of various categories of capital along the growth path of the economy. Economic growth is accompanied by capital growth as well as increase in pollution emissions. Implementing a government policy to reduce pollution emission would change the equilibrium path of capital distribution. Within the model, the government builds a corporate tax function that defines the tax rate as a function of a ‘desired’ pollution level. The tax rate decreases as the ‘desired’ pollution level is higher. When the ‘desired’ pollution level is higher than the actual pollution level, production is subsidized and pollution levels rise. An example and a simulation are presented in order to confirm the theoretical results and demonstrate that the model can be used for empirical analysis.     

Measurement of Technology Spillovers

This paper builds an externality-based model with physical and R&D capital, proves the linearity of technology functions, and derives two measures of spillovers from the relative differences between social and private rates of return. China’s regional empiric studies exhibit a reverse direction of spillovers between foreign invested firms and local economy and provide an estimation of the spillover measures of between 13% and 18%.     

Profitability Capital Accumulation and Crisis in the Greek Economy 1958–2009: a Marxist Analysis

Abstract

This study examines the behavior of the main Marxian variables in the postwar Greek economy. The different phases of the capital accumulation process are distinguished and analyzed according to the movement of the rate of profit. The ‘golden age’ of the 1958–74 period of high profitability and strong growth was followed by the stagflation crisis of the 1970s and early 1980s. After 1985, and especially after 1991, the ‘neoliberal solution’ to the crisis resulted in a modest recovery of profitability, capital accumulation and output growth based exclusively on the huge increase in the rate of exploitation for labor. When the stimulus to aggregate demand provided from debt driven personal consumption and state deficit spending was removed, the underlying structural crisis in the real economy manifested itself fully in 2009 and after.     

Region,Regionness and Regionalism in Latin America: Towards a New Synthesis

Latin American regional governance today represents a conglomerate of commercial, political and trans-societal welfarist integration projects. In this overlapping and sometimes conflicting scenario what Latin Americanness should mean, and how integration projects should respond to current challenges of global political economy are being redefined. The focus of the paper is twofold: to better understand current regional transformations and to discuss what new developments mean for how we theorise non-European regionalism. Looking at the Bolivarian Alliance for the Americas and the Union of South American Nations we ask: How are we to understand regional agreements that are grounded in different systems of rules, alternative ideas and motivations that contest ‘open regionalism’? We argue that Union of South American Nations (UNASUR) and Bolivarian Alliance for the Americas (ALBA) represent different pathways to regional building, creating foundations for post-hegemonic and post-trade regional governance. We thus challenge New Regionalist approaches that assume regionalism as taking place within and modelled by neoliberal economics, establishing the debate around ‘old’ vs. ‘new’ regionalism. As these categories are limited in grasping the full meaning and implications of post-hegemonic regional orders, we discuss UNASUR and ALBA as ‘arenas for action’ to understand divergent practices, outcomes and types of regionness emerging in alternative regional spaces in South America.     

Endogenous growth cycles with financial intermediaries and entrepreneurial innovation

This study analyzes the effects of financial intermediaries’ activities on economic fluctuations in a model of endogenous innovation cycles. In the model, I consider an economy in which entrepreneurs and financial intermediaries engage in their respective innovative activities. Entrepreneurs can invent new products and raise funds for their invention from financial intermediaries and if their invention is successful, they can produce new products. Only financial intermediaries can evaluate entrepreneurial ideas regarding their new products. Moreover, they can invest their capital to improve information about the entrepreneurial ideas and thus, meet successful entrepreneurs with a higher probability. I show that when an economy does not accumulate enough capital, and the level of financial innovation is not sufficiently high, the economy is trapped in a no-entrepreneurial innovation regime. I also show that when the financial innovation slightly develops, the economy fluctuates between the no-entrepreneurial innovation and entrepreneurial innovation regimes.     

区域智力资本对区域经济增长的作用——基于湖北省的实证研究

本文试图以湖北省1995—2006年的样板数据为对象探索区域智力资本对区域经济增长的作用。通过研究发现二者具有较强的正相关性,区域智力资本每提高1%湖北经济增长水平则提高0.754%,区域智力资本的构成要素(即区域人力资本、区域关系资本、区域结构资本和区域创新资本)对湖北经济增长水平的贡献存在显著的差异性,区域智力资本及其要素与湖北经济增长水平之间存在不同类型的均衡关系和Granger因果关系,区域智力资本及其要素对湖北经济增长水平存在不同程度的引导和促进作用。