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  4. May 2018
  5. Intangibles, Investment, and Efficiency

Intangibles, Investment, and Efficiency

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Abstract

Recent work on macroeconomic trends has emphasized slowing capital investment, but strong business profits and valuations. The retail sector is a microcosm of these trends, and accounts for a large share of the increase in aggregate business concentration also observed in recent years. We show that, in that sector, weak investment and rising concentration are associated with rising productivity. Additionally, stronger productivity is correlated with intangible investment, both over time and across subindustries. Intangible investment may thus provide a joint explanation for rising productivity, weak capital investment, and increasing industry concentration.

Citation

Crouzet, Nicolas, and Janice Eberly. 2018. "Intangibles, Investment, and Efficiency." AEA Papers and Proceedings, 108: 426-31. DOI: 10.1257/pandp.20181007

Additional Materials

JEL Classification

  • D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
  • D25 Intertemporal Firm Choice: Investment, Capacity, and Financing
  • E22 Investment; Capital; Intangible Capital; Capacity
  • G31 Capital Budgeting; Fixed Investment and Inventory Studies; Capacity
  • L13 Oligopoly and Other Imperfect Markets