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Intangible Capital, Non-Rivalry, and Growth (WP-23-05)

Nicolas Crouzet, Janice Eberly, Andrea Eisfeldt, and Dimitris Papanikolaou

The researchers provide an answer to why growth may slow even in the face of technological improvements. Their focus is on the role of intangible assets. Intangible assets are distinct from physical capital in that they do not have a physical presence, being comprised of information and requiring a storage medium. Improvements in storage and replication, such as data integrity and IP security, increases the non-rivalry of using intangibles, stimulating growth. However, the authors show how limits to excludability create a countervailing force. Depending on the strength of property-rights institutions, growth may slow even as technology lowers replication costs for intangibles, enhances their non-rivalry, and creates economies of scale and scope.

Nicolas Crouzet, Associate Professor of Finance, Northwestern University

Janice Eberly, James R. and Helen D. Russell Professor of Finance and IPR Associate, Northwestern University

Andrea Eisfeldt, Laurence D. and Lori W. Fink Endowed Chair in Finance and Professor of Finance, University of California, Los Angeles

Dimitris Papanikolaou, John L. & Helen Kellogg Professor of Finance, Northwestern University

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