The importance of intangible assets in regional economic growth: a growth accounting approach.

Spain is one of the few countries in the world that has information on investment in intangible assets with a regional breakdown, so providing evidence of its importance as a factor in regional growth is the main value added of this paper. Series of capital stock in intangible assets are constructed by regions, which incorporate not only those the national accounts consider as investments and are therefore included in gross value added (GVA), but also the intangible assets not included in GVA, which the recent literature understand to be an important source of economic growth. Using the growth accounting approach, the results show that intangible assets explain 14.3% of Spain's GVA growth, of which 9.4 pp correspond to the assets included in GVA (software, R&D and intellectual property rights) and 4.9 pp account for the rest (expenditure on design, advertising, market research, firm-provided worker training and improvements to companies' organizational structure). Notable differences are also seen across the country, with investment in intangibles explaining up to 20% of economic growth in some regions. The importance of the contribution from these intangible assets highlights the need for economic policy measures (including regional policies) that boost investment in intangible assets and improve conditions of access to financing.