American Economic Review: Vol. 104 No. 5 (May 2014)

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The Value and Ownership of Intangible Capital

Article Citation

Eisfeldt, Andrea L., and Dimitris Papanikolaou. 2014. "The Value and Ownership of Intangible Capital." American Economic Review, 104(5): 189-94.

DOI: 10.1257/aer.104.5.189

Abstract

Intangible capital which relies on essential human inputs, or "organization capital," presents a unique challenge for measurement. Organization capital cannot be fully owned by firms' financiers, because it is partly embodied in key labor inputs. Instead, cash flows must be shared with key talent and thus neither book nor market values will fully capture its value. Measurement of organization capital requires a model featuring these unique property rights. We use accounting data along with a simple example of such a model to measure the fraction of the US capital stock which is missing from book and market values.

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Additional Materials

Online Appendix (15.48 KB) | Download Data Set (66.18 KB) | Author Disclosure Statement(s) (605.35 KB)

Authors

Eisfeldt, Andrea L. (UCLA)
Papanikolaou, Dimitris (Northwestern U)

JEL Classifications

E22: Capital; Investment; Capacity
G30: Corporate Finance and Governance: General
M41: Accounting


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