Unbundling Technology Adoption and TFP at the Firm Level: Do Intangibles Matter?

We use a panel of European firms to investigate the relationship between intangible assets andproductivity. We distinguish between total factor productivity (tfp) and technology adoption,whereas standard estimations consider only a notion of productivity that conflates the twoeffects. Although we are unable to address simultaneity, we allow for the existence of multipletechnologies within sectors through a mixture model approach. We find that intangible assetshave nonnegligible effects that both push firms toward better technologies (technology adoptioneffects) and allow for more efficient exploitation of a given technology (tfp effects).