Intangible Investments and their Consequences: New evidence from unlisted Japanese companies

Although there is widespread recognition of the importance of investment in intangibles, this is difficult to observe from the published data, even for listed companies. This study investigates the extent of investments in intangibles and their consequences for unlisted companies in Japan. For this purpose, we employ unique microdata gathered from a recent survey of unlisted companies and financial information from elsewhere matched with the surveyed companies. The analysis covers a broad range of intangible investment activities involving scientific and technological research and development, software production, product development and design, content production, marketing, organizational change, and education and training (both on and off the job). The empirical results suggest that these investments enhance the growth of companies rather than their profitability.