Template-type: ReDIF-Paper 1.0
Author-Name: Antonelli, Cristiano 
Author-Email: cristiano.antonelli@unito.it 
Author-Name: Orsatti, Gianluca 
Author-Email: gianluca.orsatti@unito.it
Author-Name: Pialli, Guido  
Author-Email: g.pialli@ucl.ac.uk 
Author-Workplace-Name: University of Turin
Author-Workplace-Homepage: http://www.est.unito.it/
Title: The Paradox of the Productivity Slowdown in the Knowledge Economy.
Abstract: Paul David’s intellectual legacy offers a compelling framework to address the new productivity
paradox: the knowledge age is visible everywhere but in the productivity statistics. The apparent and
hopefully transient decline in productivity growth rates is due to the diffusion of new knowledge-
intensive technologies and the increase in the size of production inputs triggered by the new
accounting procedures which capitalize intangible assets. The capitalization of intangible assets has
caused a shift effect and an increase in the size of capital inputs which will continue to increase as
long as firms continue to introduce and adopt knowledge intensive technologies. Once their diffusion
is complete, this shift effect and the apparent productivity decline will cease. We provide empirical
evidence at the European sectoral level of the diffusion of intangible assets and its strong and positive
effect on total factor productivity when these intangible assets are not capitalized, and its negative
effects on total factor productivity when they are capitalized and are included in production function
estimates as inputs.
Length: pages 24
Creation-Date: 2023-12
File-URL: https://www.est.unito.it/do/home.pl/Download?doc=/allegati/wp2023dip/wp_24_2023.pdf
File-Format: Application/PDF
Handle: RePEc:uto:labeco:202308