Author information:
Magdolna Csath: Pázmány Péter Catholic University, Research Professor. E-mail: csath.magdolna@ppke.hu
Abstract:
Based on international literature and data, this essay examines the conditions for improving competitiveness in Hungary in relation to intangible assets and capital investment. The link between productivity – as the basis for competitiveness – and intangible capital investment is also discussed. The essay argues that, although there is no consensus on the interpretation of the concepts examined and further analysis and modelling are needed, the relationships presented suggest that higher levels of intangible asset and capital investment would contribute to improving the productivity and competitiveness of the Hungarian economy. First, because this would improve the overall operational efficiency of tangible investments, and second, because it would support the transition to a knowledge economy, the key condition for boosting competitiveness.
Cite as (APA):
Csath, M. (2023). The Role of Intangible Capital Investment and Intangible Assets in Improving Competitiveness. Financial and Economic Review, 22(2), 124–142. https://doi.org/10.33893/FER.22.2.124
Column:
Essay
Journal of Economic Literature (JEL) codes:
E22, F63, I25, J24, O34
Keywords:
intangible capital investment, intangible asset, intellectual capital, competitiveness, productivity
References:
Al-Fehaid, H.Y.N. – Shaili, V. (2021): Knowledge Economy and its Implications in the Kingdom of Saudi Arabia. SSRN, 18 May. https://doi.org/10.2139/ssrn.3846918
Baksay, G. – Matolcsy, Gy. – Virág, B. (2022): Új fenntartható közgazdaságtan (New Sustainable Economics). Global Discussion Paper. Magyar Nemzeti Bank. https://www.mnb.hu/web/sw/static/file/uj-fenntarthato-kozgazdasagtan-single.pdf
Bruno, R.L. – Douarin, E. – Korosteleva, J.A. – Radosevic, S. (2019): Determinants of Productivity Gap in the European Union: A Multilevel Perspective. IZA Discussion Paper No. 12542. https://doi.org/10.2139/ssrn.3445808
Brynjolfsson, E. – Rock, D. – Syverson, C. (2017): Artificial intelligence and the modern productivity paradox: A clash of expectations and statistics. NBER Working Paper No. 24001. https://doi.org/10.3386/w24001
Corrado, C. – Haskel, J. – Jona-Lasinio, C. (2017): Knowledge Spillovers, ICT and Productivity Growth. Oxford Bulletin of Economics and Statistics. 79(4): 592–618. https://doi.org/10.1111/obes.12171
Csath, M. (2022): Growth or Development Trap. Financial and Economic Review, 21(2): 152–174. https://doi.org/10.33893/FER.21.2.152
Drucker, P. (2006): The Effective Executive. HarperCollins, New York.
EBRD (2019): Introduction the EBRD Knowledge Economy Index. March. European Bank for Reconstruction and Development. https://www.ebrd.com/news/publications/brochures/ebrd-knowledge-economy-index.html. Downloaded: 5 March 2023.
EC (2021): Reflections on Complementarities in Capital Formation & Production: Tangible & Intangible Assets Across Europe. Discussion Paper 152. Luxembourg: Publications Office of the European Union.
EC (2022): European Innovation Scoreboard 2022. Publication Office of the European Union, Directorate-General for Research and Development. https://doi.org/10.2777/309907
Edvinsson, L. – Malone, M.S. (1997): Intellectual Capital: Realizing Your Company’s True Value by Finding Its Hidden Brainpower. Harper Business.
EIB (2021): EIB Investment Report 2020/2021: Building a smart and green Europe in the COVID-19 era. European Investment Bank. https://doi.org/10.2867/904099
Elnasri, A. – Fox. K.J. (2017): The contribution of research and innovation to productivity. Journal of Productivity Analysis. 47: 291–308. https://doi.org/10.1007/s11123-017-0503-9
Eurostat (2022a): Adult learning statistics. May 2022. https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Adult_learning_statistics&And_what_about_the_participation_rate_of_adults_in_education_and_training_in_the_last_4_weeks_compared_to_12_months_in_2016.3F. Downloaded: 4 February 2023.
Eurostat (2022b): General government expenditure by function in 2020, 28 February 2022. https://ec.europa.eu/eurostat/en/web/products-eurostat-news/-/ddn-20220228-2. Downloaded: 30 January 2023.
Eurostat (2022c): Educational attainment statistics. https://ec.europa.eu/eurostat/databrowser/view/edat_ifs_9903/default/table?lang=en. Downloaded: 2 February 2023.
Eurostat (2022d): Labour productivity per hour worked, 30 January 2023. https://ec.europa.eu/eurostat/databrowser/view/nama_10_lp_ulc/default/table?lang=en. Downloaded: 3 February 2023.
Goodridge, P. – Haskel, J. – Wallis, G. (2016): Spillovers from R&D and Other Intangible Investments: Evidence from UK Industries. Review of Income and Wealth, 63(s1): S22–S48. https://doi.org/10.1111/roiw.12251
Haskel, J. – Westlake, S. (2018): Capitalism without Capital. The Rise of the Intangible Economy. Princeton University Press. Princeton & Oxford. https://doi.org/10.1515/9781400888320
HCSO (2022): A kutatás-fejlesztés és az innováció főbb arányai (Main rates of R&D and innovation). https://www.ksh.hu/stadat_files/tte/hu/tte0001.html. Downloaded: 30 November 2022.
IMD (2022): IMD World Competitiveness Yearbook 2022. International Institute for Management Development. Lausanne, Switzerland. https://www.imd.org/centers/world-competitiveness-center/rankings/world-competitiveness/
Krogh, von G. – Ichijo, K. – Nonaka, I. (2000): Enabling Knowledge Creation: How to Unlock the Mystery of Tacit Knowledge and Release the Power of Innovation. Oxford University Press, Inc. New York. https://doi.org/10.1093/acprof:oso/9780195126167.001.0001
Matolcsy, Gy. (2022): The Appearance of Economic, Social, Financial and Environmental Sustainability Aspects in the Practices of the National Bank of Hungary. Public Finance Quarterly, 2022(3): 315–334. https://doi.org/10.35551/PFQ_2022_3_1
McAfee, A. – Brynjolfsson E. (2012): Race Against the Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity and Irreversible Transforming Employment and the Economy. Digital Frontiers Press, Cambridge, MA.
MNB (2022): Productivity Report 2022. Magyar Nemzeti Bank. https://www.mnb.hu/letoltes/termelekenysegi-jelentes-eng-2022-julius-digitalis.pdf
Nonaka, I. – Takeuchi, H. (1995): The Knowledge-Creating Company. Oxford University Press. New York.
OECD (2021): Mind the financing gap: Enhancing the contribution of intangible assets to productivity. OECD Economics Department. Working Papers No. 1681. https://doi.org/10.1787/7aefd0d9-en
Palotai, D. – Virág, B. (eds.) (2016): Competitiveness and Growth. Magyar Nemzeti Bank. https://www.mnb.hu/en/publications/mnb-book-series/competitiveness-and-growth
Roth, F. (2022): Intangible Capital and Growth. Essays on Labor Productivity, Monetary Economics, and Political Economy. Vol. 1. Contributions to Economics. Springer, Open Access. https://doi.org/10.1007/978-3-030-86186-5
Roth, F. – Tsakanikas, A. (2021): Policies for Enhancing Growth from Intangibles at the Aggregate and Sectoral Levels. European Policy Brief, GLOBALINTO, 17 November. https://globalinto.eu/wp-content/uploads/2021/11/GLOBALINTO-European_Policy_Brief-Macro-underpinnings.pdf. Downloaded: 1 December 2022.
Steward, T.A. (1997): Intellectual Capital. Nicholas Brealey Publishing, London.
Thum-Thysen, A. – Voigt, P. – Bilbao-Osorio, B. – Maier, C. – Ognyanova, D. (2017): Unlocking investment in intangible assets. Discussion Paper 047, EC – Economy and Finance, May. https://economy-finance.ec.europa.eu/publications/unlocking-investment-intangible-assets_en. Downloaded: 1 December 2022.
Várnai, T. (2022): Relationship between capital and economic growth: shifting the focus from quantity to quality. In: Baksay, G. – Matolcsy, Gy. – Virág, B. (eds.): New Sustainable Economics – Global Discussion Paper. Magyar Nemzeti Bank, pp. 71–80. https://www.mnb.hu/web/sw/static/file/NEW_SUSTAINABLE_ECONOMICS_-_Global_discussion_paper_2022.pdf
Wolters, T. (ed.) (2007): Measuring the New Economy: Statistics between Hard-Boiled Indicators and Intangible Phenomena. Emerald Group Publishing Ltd. Bingley, UK.