Intangible assets and productivity growth differentials across EU economies: The role of ICT and R&D

We analyze productivity growth differentials across the EU in the perspective of intangible, as well as tangible, capital accumulation. Based on a new international dataset on intangibles, we identify three main EU regions corresponding to the Northern area, Central Europe and the Mediterranean area. We find that intangible capital accumulation has strongly contributed to labor productivity growth in the best performing European economies/regions. Moreover, we find evidence that intangible capital accumulation, especially in software and R&D, is associated with spillover effects.