This paper looks at the channels through which intangible assets affect productivity.
The econometric analysis exploits a new dataset on intangible investment (INTAN-Invest)
in conjunction with EUKLEMS productivity estimates for 10 EU member states from 1998
to 2007. We find that (a) the output elasticity of intangible capital depends upon ICT inten-
sity, consistent with complementarities between ICT and intangible capital; (b) non-R&D
intangible capital has higher estimated output elasticities than its factor shares, as does
(c) labour quality. The last two findings are consistent with spillovers from investments in
knowledge-based/intangible capital and skills.