Role of Intangible Assets to Create Wealth- Empirical Evidence from Select EU Countries & US

Surendar Vaddeppalli, Laly Antoney


Knowledge and innovation are the key factors influencing growth and competitiveness of firms and affecting economy of a country. Innovation also needs complementary assets in addition to research and development. Introduction of internet, advanced telecommunication systems and innovative technological products has helped contributing economic growth. Investments in knowledge creation are the strategic investments giving long-term benefits for the firms and the economy as a whole. In most of the advanced companies, the share of intangible assets against their total assets has been growing in the last few years. Especially in countries like the US the UK and a few countries in Europe, the investments made in intangible assets increased considerably while their investments in tangible assets are more or less stable. Most of knowledge-based companies possess a nominal investment in physical assets compared to their overall assets. Many of the policy makers often overlook the intangible assets; however, success of big companies is seen more due to their investments in their intangible assets. A few studies show how investment in intangible assets had an impact on performance and contribution to economic growth. It is tough to measure intangible capital of a firm; however, several studies have used innovation input variables such as software, innovative property, and economic competencies. The objective of this paper is to focus impact of investments of different nations on growth and competitiveness of economy of those nations.

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