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Title Can Investment in Intangibles Explain the Swedish Productivity Boom in the 1990s?*
Author Harald Edquist
Year 2009
Abstract After a severe crisis in the early 1990s, the Swedish economy experienced a boom in productivity
growth. According to economists there have been primarily three explanations for the fast productivity
growth in 1995–2004: Market reforms, recovery from the crisis and the impact of information and
communication technology (ICT). This paper offers an alternative view by recognizing that firms make
substantial investment in intangible assets such as R&D, design, advertising etc. These investments are
not classified as investment in the National Accounts, where 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 bn SEK in 2004 or 9 percent of GDP. Moreover, intangible capital
accounted for almost 50 percent of labor productivity growth in the Swedish business sector 1995–
2004. Thus, investment in intangibles was an important source to the Swedish productivity boom in
1995–2004.
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Topic revision: r2 - 20 Dec 2010, JonathanHaskel
 

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