Intangibles, Investment, and Efficiency

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,...

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Bibliographic Details
Published in:AEA papers and proceedings 2018-05, Vol.108, p.426-431
Main Authors: Crouzet, Nicolas, Eberly, Janice
Format: Article
Language:English
Subjects:
INVESTMENT, RATES AND RENTS
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Summary: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.
ISSN:2574-0768
2574-0776
DOI:10.1257/pandp.20181007