Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/333524 
Year of Publication: 
2025
Series/Report no.: 
WIFO Working Papers No. 711
Publisher: 
Austrian Institute of Economic Research (WIFO), Vienna
Abstract: 
We study the short- and medium-term extensive and intensive margins of intangible investments in firm growth processes. The intensive and extensive margins of investment are both highly skewed and differ across sectors. Less productive firms are less likely to invest in intangibles, while incorporated firms are more likely to do so. Intangible capital only complements physical capital for a limited number of firms. Intangible investment is positively associated with short-term productivity growth, particularly among firms that consistently invest over time. The medium-term effects on productivity are limited and are largely confined to top-performing firms. We find systematic short-term effects of intangible investment on employment growth. Regular investment patterns correlate with higher employment growth over both time horizons. These results challenge the conventional assumption that intangible capital uniformly enhances firm performance. They also highlight the importance of sustained investment behavior and sectoral context.
Subjects: 
intangible capital
employment
productivity
lumpy investment
firm growth
sample selection
JEL: 
D22
D24
D25
Document Type: 
Working Paper

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