Working Paper No. 809

Can Investment in Intangibles Explain the Swedish Productivity Boom in the 1990s?

Published: September 23, 2009; revised November 8, 2009Pages: 42Keywords: Intangibles; Investment; Economic growthJEL-codes: O15; O16; O47; O52

Can Investment in Intangibles Explain the Swedish Productivity Boom in the 1990s? Harald Edquist

After a severe crisis in the early 1990s, the Swedish economy experienced a boom in productivity growth. Economists have presented three explanations for the fast productivity growth in 1995–2004: market reforms, crisis recovery and the impact of information and communication technology (ICT). This paper offers an alternative view, emphasizing instead firms’ substantial investment in intangible assets such as R&D, design, and advertising. These investments are not classified as investment in the National Accounts, however, in which only tangible assets are defined as investment. This paper provides estimates of investment in intangible assets and uses the growth accounting framework to analyze the Swedish productivity boom. The results show that investment in intangibles was approximately 246 billion SEK in 2004 or 9 percent of GDP. Moreover, intangible capital accounted for almost 35 percent of labor productivity growth in the Swedish business sector in 1995–2004. Thus, the Swedish TFP growth that was one of the highest among OECD-countries was reduced substantially when investment in intangibles was included in the growth accounting analysis 1995–2004. In the period 1995–2000, TFP growth was only 0.4 percentage points—almost all labor productivity growth could be explained by factor inputs, while in 2000–2004 TFP growth was considerably larger.

  Ursprunglig version av WP 809.

Interdisciplinary European Studies

The European Union and the Return of the Nation State


This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

About the book


Seminars organized by IFN


To present ongoing research informal brown-bag seminars are held on Mondays at 11:30 am. This is an opportunity for IFN researchers to test ideas and results.

Academically oriented seminars are most of the time held on Wednesdays at 10 am. At these events researchers from IFN and other institutions present their research.

In addition, IFN organizes seminars open to the public. Topics for these are derived from the IFN research.

Research Institute of Industrial Economics, Grevgatan 34 - 2 fl, Box 55665, SE-102 15 Stockholm, Sweden | Phone: +46-(0)8-665 45 00 |