This thesis aims to contribute to a better understanding of the overall magnitude of intangible investment and the impact of this intangible investment on the behavior of the capital stock and on the value of capital goods. I begin by constructing a data set to document firms’ expenditures on an identi- fiable list of intangible items in Canada. I then examine the implications of treating intangible spending as the acquisition of final (investment) goods on estimates of GDP growth for Canada. I find that investment in intangible capital by 2002 is almost as large as the investment in physical capital. Furthermore, the growth in GDP and labor productivity may be underestimated by as much as 0.1 percentage point per year during this same period. I proceed by measuring the size of the stock of the intangible capital in Canada using newly released data on the market value of all securities in the economy. The approach taken relies on a quantitative application of the q-theory of investment to generate the quantity of capital owned by firms. I find that the intangible capital stock accounted for approximately 30% of overall capital since 1994. Of this, the R&D reported by national accounts makes up only 23%. These results imply that official Canadian statistics failed to account for 26% of the value of the capital stock in their 2005 quarterly data collection. Finally, I extend the q-theory of investment to model explicitly the decision of firms to invest in intangibles. I then use the model to measure the contribution of intangible goods to the overall capital stock in the U.S. The model departs from the one mentioned earlier in that it highlights the embodiment of intangible goods in tangibles and the role of relative price movements in the measurement of the contribution of each type of investment to the overall capital stock. I find that the growth in the overall capital stock from the late-80s until 2000 was driven mainly by an increase in the contribution of intangibles. However, the contribution of intangibles fell consistently after 2000. These results underscore the importance of accounting for the movements in the price of intangibles rather than focusing only on their rising share in overall investment. / Thesis (Ph.D, Economics) -- Queen's University, 2008-06-26 09:32:06.389

Le travail de recherche qui suit vise à l’obtention d’une méthodologie opératoire propre à faire évoluer la culture organisationnelle d’une firme dans le domaine de l’activité inventive, en particulier en opérant un transfert culturel à partir du monde académique. Il s’agit de construire un procédé de recueil et d’explicitation des connaissances inventives ayant abouti à une conception nouvelle, puis à exploiter en interne les résultats de ce premier procédé en appliquant ceux-ci à un second procédé ayant la dimension d’un apprentissage organisationnel. Le dispositif expérimental présenté a visé à réaliser la validation des hypothèses formulées. L’étude de cas dans notre organisation a permis de concrétiser, sur la base du bilan de l’évolution temporelle du patrimoine intellectuel inventif, l’approche de la créativité stimulée par les connaissances dans un cadre limité à trois domaines de connaissance et où l’on vise une innovation incrémentale. Ce mécanisme met en jeu individuellement et collégialement un ensemble d’acteurs impliqués dans l’inventaire préalable du patrimoine intellectuel inventif et dans son évolution stratégique au sens de l’organisation. En outre, ce travail introduit une vision peu commune de l’activité de R & T d’une organisation industrielle, vision où l’approche par la connaissance non contextuelle se substitue aux approches contextuelles usuelles par produits et services. Cette méthodologie opératoire s’appuie sur une approche conceptuelle de la créativité appliquée à la création de connaissances inventives. Cette création de connaissances est interprétée comme une mutation épistémologique déclenchée par la nature profondément paradoxale de la créativité. Le (futur) créateur doit porter en lui l’essence d’une oeuvre constituant la future création, la créativité lui permettant d’identifier cette essence par abstraction et l’inventivité lui permettant de donner performativement une Forme à cette abstraction. La mise au jour de liens puissamment opératoires entre des domaines peu mis en regard jusqu’alors, ceux de la Créativité/Inventivité, du Patrimoine Intellectuel et de l’Ingénierie des Connaissances fournit de solides fondations à l’approche conceptuelle de la création de connaissances inventives, ainsi qu’à de nombreuses perspectives de recherches supplémentaires. / The following research work aims at getting an operational methodology able to make firm’s organizational culture progress in the inventive activity field, especially through a cultural transfer from academic world. The point is first building a process gathering and making explicit inventive knowledge which succeeded in a new design. Then, results coming out of this first process are applied to a second process featuring organizational learning. We described an experimental plan dedicated to the validation of the research hypotheses that we formulated. The case study based on our own organization was the opportunity to get a first operational validation of Knowledge-based innovation method applied to a 3-knowledge domain configuration for incremental innovation. Creativity stimulation was operated through the time-evolution synthesis of intangible inventive intellectual corpus. This mechanism both individually and collectively involves numerous actors already solicited for the preliminary inventory of inventive intellectual corpus and for its strategic evolution according to the firm.Moreover, this work brings an usual view on industrial R & T activity, where non contextual knowledge approach is substituted to conventional contextual approach bases on products. This operational methodology is based on a conceptual approach of creativity applied to the generation of inventive knowledge, which is seen as an epistemological mutation triggered by the most paradoxical nature of creativity. The (future) creator must house in himself the essence of intellectual work which will be the future creation: creativity allows him to identify this essence by abstraction and inventivity allows him to performatively give a Form to this abstraction. By revealing strongly operative links between poorly linked domains(Creativity/Inventivity, Intellectual Corpus, Knowledge Management), solid foundations are brought to the conceptual approach of inventive knowledge generation and to numerous perspectives of extra research.

No description available.

The main idea of this thesis is to deepen our understanding of the relationship between tax policy and heterogeneous capital. The first chapter revisits the question of whether preferential tax regimes are desirable in a context where some jurisdictions have leadership advantages in their choice of tax policy. It is argued that if regions or countries involved in tax competition act sequentially as Stackelberg competitors, they will prefer to limit the use of preferential tax policy. If firms located in small regions face higher mobility costs on average than those located in large regions, small regions want to ban preferential tax regimes while large regions will tend to support them. If jurisdictions are populated mainly by firms with low mobility costs, they will prefer preferential tax treatments. On the other hand, if they are populated mostly by firms with high mobility costs, small regions want to restrict preferential tax policies while large regions will favour them. The second chapter embraces the neoclassical theory of investment to model the rate of investment in physical and intangible capital. It uses data from the EU KLEMS database, the Oxford University Centre for Business Taxation and the Tax Foundation. It concludes that the equations for the rate of investment in physical and intangible capital are distinct. Corporate tax incentives affect the rates of investment in physical and intangible capital, but differently. The higher rate of depreciation of intangible capital relative to physical capital seems to explain the increasing ratio of investment in intangible to physical capital. The third chapter examines heterogeneity by type of capital within the relationship between capital and its user cost, for five types of physical capital asset and two types of intangible capital asset. The dataset is almost similar to that of chapter two. The results show that, in the short-run dynamics, both the dynamic fixed-effects and GMM results seem to agree on the role of changes in the user cost of capital on the accumulation of the stock of capital. Overall, dynamic fixed-effects estimation seems to yield results that are more consistent with the theoretical conclusions on investment behaviour and empirical results for physical capital already established in the literature.

This thesis investigates the role of intangible capital and intangible investment (the intangibles) in explaining modern economic activity. It presents an in depth analysis of the context in which the intangibles are studied in the economic literature, and modifies existing theoretical real business cycle (RBC) models to account for the presence of the intangibles. The newly developed models are further used to address previously documented issues such as the Canadian productivity puzzle and the quantity anomaly. Chapter 1 provides a detailed explanation of the concept of the intangibles in the economic literature. It also highlights the importance of accounting for the intangibles during economic analysis and presents a detailed analysis of how they are measured and modeled in practice. The main findings indicate that the intangibles have contributed positively to economic growth and productivity. The need for improvements in the measurement and modeling of the intangibles is also identified. Specifically, there is a need to improve the estimates of the depreciation rates and price deflators that are used in the measurement of intangible assets; and a need for proper model specification testing to validate the inclusion of the intangibles when modeling economic activity. Chapter 2 explores the role of the intangibles in explaining business cycles in a small open economy. The benchmark two-sector model developed in this chapter is tailored to the Canadian economy and allows for the examination of the relationship between intangible investment and the trade balance, which has not been attempted to date in the RBC literature. Overall, this chapter finds that technological change in the production of intangible investment plays an important role in explaining labour productivity and business cycles in a small open economy. Simulations based on the benchmark two-sector model highlight the circumstances under which the trade balance to business sector output ratio tends to be procyclical. The extended model is further used to make predictions about the Canadian productivity puzzle, where the main findings reinforce the need to re-evaluate the traditional measure of productivity in business cycle models. Chapter 3 is motivated by the rising levels of intangible investment in the U.S. and Europe. These investments have been expensed in the national accounts rather than capitalized (unmeasured investment) and this practice has resulted in the traditional measures of investment, productivity and output underestimating their true levels. In order to investigate the economic impact of this practice in an international setting, the standard two-country business cycle model is extended to include such intangibles. The main results imply that the traditional measures of output and labour productivity differences across countries are understated when intangible investment is not properly accounted for. The modeling of intangible investment also improves the fit of the model based upon recent data on international business cycles. This is most evident in the international correlation of investment, which the standard model predicts to be low (0.13) and the extended model correctly predicts to be high (0.66) as seen in the data (0.74). / Dissertation / Doctor of Philosophy (PhD)

This dissertation examines the effects that intangible capital and diversity reputation have on firm performance. In Chapter 1, entitled “CEO Overconfidence and Intangible Corporate Investments,” we extend the corporate investment and CEO overconfidence literature by examining how CEO overconfidence affects investment-cashflow sensitivity using a new measure of Tobin’s q and cashflow. Specifically, we incorporate intangible capital, which neo-classical investment theory mostly ignores, in the empirical analysis. We develop three overconfidence measures and their interaction with the respective standard and new cashflow settings to capture the investment-cashflow sensitivity effect of CEO overconfidence. We use three investment measures (physical, intangible, and total investments) and find that the effect of managerial overconfidence on investment-cashflow sensitivity is more prominent for corporate intangible investments than physical investments. Moreover, our results show that the standard measure of physical capital weakly explains the intangible investment-cashflow density. Our study offers useful insights in that it explains the reason why investment-cashflow sensitivity has been weaker in recent years. We also show that investment-cashflow sensitivity is stronger when intangible capital is incorporated into the analysis. Chapter 2 is entitled “Diversity Reputation and Firm Performance.” The modern American workplace is a microcosm of modern American society. The increasing diversity of the American workforce has made the increasing diversity of the American workplace a necessity. We explore the impact of diversity reputation on firm performance. We measure a firm’s diversity reputation by its inclusion in DiversityInc’s list of Top 50 Companies for Diversity. We measure firm performance by various accounting measures (return on assets, return on investment, and return on sales) as well as one market-based measure, Tobin’s Q. We find that firms that have a better diversity reputation outperform firms that do not.

<p>My dissertation, consisting of three related essays, aims to understand the role of macroeconomic risks in the stock and bond markets. In the first chapter, I build a financial intermediary sector with a leverage constraint a la Gertler and Kiyotaki (2010) into an endowment economy with an independently and identically distributed consumption growth process and recursive preferences. I use a global method to solve the model, and show that accounting for occasionally binding constraint is important for quantifying the asset pricing implications. Quantitatively, the model generates a procyclical and persistent variation of price-dividend ratio, and a high and countercyclical equity premium. As a distinct prediction from the model, in the credit crunch, high TED spread, due to a liquidity premium, coincides with low stock price and high stock market volatility, a pattern I confirm in the data.</p><p>In the second chapter, which is coauthored with Hengjie Ai and Mariano Croce, we model investment options as intangible capital in a production economy in which younger vintages of assets in place have lower exposure to aggregate productivity risk. In equilibrium, physical capital requires a substantially higher expected return than intangible capital. Quantitatively, our model rationalizes a significant share of the observed difference in the average return of book-to-market-sorted portfolios (value premium). Our economy also produces (1) a high premium of the aggregate stock market over the risk-free interest rate, (2) a low and smooth risk-free interest rate, and (3) key features of the consumption and investment dynamics in the U.S. data.</p><p>In the third chapter, I study the joint determinants of stock and bond returns in Bansal and Yaron (2004) long-run risks model framework with regime shifts in consumption and inflation dynamics -- in particular, the means, volatilities, and the correlation structure between consumption growth and inflation are regime-dependent. This general equilibrium framework can (1) generate time-varying and switching signs of stock and bond correlations, as well as switching signs of bond risk premium; (2) quantitatively reproduce various other salient empirical features in stock and bond markets, including time-varying equity and bond return premia, regime shifts in real and nominal yield curve, the violation of expectations hypothesis of bond returns. The model shows that term structure of interest rates and stock-bond correlation are intimately related to business cycles, while long-run risks play a more important role to account for high equity premium than business cycle risks.</p> / Dissertation

La mesure de la valeur immatérielle de l’entreprise est un sujet de grande préoccupation depuis des années. La présente thèse propose un modèle intégré de mesure de la valeur immatérielle des entreprises. Elle découle d’une alternance permanente entre de la modélisation empirique, des expérimentations en entreprises et des preuves académiques des mêmes concepts et résultats. Elle tente de répondre à cinq besoins qui étaient non couverts ou insuffisamment couverts dans le domaine de l’immatériel:1. Etablir la nécessité pour l’évaluation du capital immatériel d’une approche systémique.2. Définir une taxonomie d’actifs qui incorpore toutes les composantes de l’entreprise qui sont objectivement impliquées dans le processus de création de valeur et dont la durée de vie est supérieure à 12 mois; c’est-à-dire tous les éléments qui ont une valeur.3. Établir des règles claires qui permettent de comprendre l’articulation entre cette taxonomie et un bilan comptable d’entreprise.4. Montrer que les évaluations extra-financières de composantes immatérielles produites par le modèle propose sont corrélées de façon robuste à la performance économique des firmes, ce qui valide la pertinence de la taxonomie et du rating extra-financier proposes5. Proposer un ensemble d'outils cohérents pour calculer la valeur financière des actifs immatériels et par extension des entreprises qui prennent en compte leurs actifs physiques, financiers et immatériels. Montrer que les valorisations qui en découlent sont cohérentes par rapport aux approches classiques mais également qu’elles apportent aux praticiens de l’évaluation des outils précieux qui réduisent le risque d’erreur.Au final, le modèle proposé offre:1. une taxonomie d’actifs qui soit complémentaire à la norme IAS-IFRS et qui permette de produire un bilan étendu,2. une méthode d'évaluation extra-financière,3. une démarche structurée pour l’évaluation financière des actifs immatériels et par extension des entreprises. / Measuring the intangible value of a company has been a subject of great concern for years. This thesis proposes an integrated model for measuring the intangible value of companies. It stems from a permanent alternation between empirical modeling, business experiments and academic evidence of the same concepts and results. It tries to meet five needs that were not covered or insufficiently covered in the field of intangible:1. Establish a systemic approach to the evaluation of intangible capital.2. Define an asset taxonomy that incorporates all the components of a firm that are objectively involved in the value creation process and whose lifetime is greater than 12 months; that is, all elements that have a value.3. Establish clear rules for understanding the relationship between this taxonomy and corporate accounting.4. Show that extra-financial assessments of intangible components produced by the proposed model are robustly correlated with firms' economic performance, validating the relevance of the taxonomy and the rating proposed5. Propose a coherent set of tools for calculating the financial value of intangible assets and, by extension, of companies that take into account their physical, financial and intangible assets. Show that the resulting valuations are consistent with conventional approaches, but also that they provide valuation practitioners with valuable tools that reduce the risk of error.In the end, the proposed model offers:1. an asset taxonomy that complements the IAS-IFRS standard and allows the production of an extensive balance sheet,2. an extra-financial evaluation method,3. a structured approach for the financial evaluation of intangible assets and by extension of enterprises.

<p>In Chapter 1, I construct a new proxy for Tobin's q that incorporates the replacement cost of patent capital. This proxy, PI (physical plus intangible) q, explains up to 64\% more variation in investment than other proxies for q. Furthermore, investment is more sensitive to PI q than to other proxies for q. Although investment is predicted more accurately by, and is more sensitive to, PI q, controlling for PI q leads to relatively higher, not lower, cash flow coefficients. All results are stronger in subsamples with more patent capital. Overall, using PI q strengthens the historically weak investment-q relation.</p> <p><br></p> <p>Chapter 2 includes Noah Stoffman and M. Deniz Yavuz as co-authors, and in this chapter, we find that small innovators (i.e., small, innovative firms) earn higher returns than small non-innovators for up to five years. We find no such innovative premium among large firms. A battery of tests shows that our results are explained by risk, not investor underreaction. Small innovators are especially risky because they focus more on risky product innovation and rely more on organization capital that amplifies their systematic risk. In addition, small innovators contribute significantly to the size premium. Overall, small innovators have a higher cost of equity, which potentially explains why they rely heavily on internal capital.</p>

This dissertation consists of three essays on firm finances and macroeconomics. In Chapter 1, I empirically investigate the relationship between firms' financial positions and asset tangibility by drawing on a CRSP/Compustat merged dataset of US public firms from 1987 to 2016. Intangible capital has grown in importance as the US economy has evolved towards service-based and technology-based industries with a decline in the physical capital share. Intangible capital spending is a type of capital expenditure that is not negligible compared to physical capital investment. The key finding of my empirical exercise is that industries and firms with lower average asset tangibility have lower average debt-to-sales ratios and higher average values of distance-to-default both in the long run and short run. Asset tangibility is a proxy for the recovery rate of capital since intangible capital is considered less valuable collateral, so the empirical evidence suggests that the recovery rate of capital is related to borrowing and default. Chapter 2 structurally estimates the recovery rate of capital, which is difficult to observe in the data, and quantitatively analyzes the aggregate implications of the empirical findings in the previous chapter. The recovery rate of capital determines lenders' credit supply and affects the demand and total credit amounts in equilibrium. Recent rising intangibles in the US may reduce recovery. I build a canonical quantitative general equilibrium heterogeneous firm model with risky debt, capital accumulation, and default. I estimate the model parameters by matching the covariance matrix of profit, investment, and debt, the average spread, and the average default rate in my data sample. The simulated method of moments (SMM) estimate of the recovery rate is 74% when targeting moments constructed with only physical capital. The counterfactuals reveal that declines in the recovery rate reduce aggregate output, credit, and welfare by constraining capital accumulation. Tackling intangibles by a broader notion of capital, I estimate a recovery rate of 46% with the same model structure, implying that rising intangibles could cause nontrivial output and welfare losses due to financial frictions. Chapter 3 examines the causal effect of immigration on local entrepreneurship in US counties. I use the immigration shock constructed in Burchardi et al. (2020) as an instrumental variable to predict the total number of migrants flowing into each US county from 1990 to 2010. I use the entrepreneurship indices from the Startup Cartography Project (Andrews et al., 2020) to measure the quantity and quality of US start-ups at the county-level. First, I find a strong and significant causal impact of immigration on the number of new business registrants per person. Second, I find a significant causal impact of immigration on the expected number of start-ups with growth per person. I also show that the influx of immigrants can increase the local average wage per capita. To interpret these empirical findings, I build a model of entrepreneurship which implies that if immigration shifts the distribution of entrepreneurial acumen to the right, it increases the wage rate, the fraction of entrepreneurs, and the mean quality of entrepreneurs. These results suggest that immigration is an essential driver of economic dynamism via entrepreneurship.