Measuring Organization Capital in Japan: An Empirical Assessment Using Firm-Level Data

Abstract

Globalization and the ICT revolution of the 1990s have forced

firms to reorganize in order to survive in a more competitive

market. Using an optimizing firm model with multiple assets, we

examined whether organization capital is accumulated with

investment in several types of assets. In contrast to Cumminss

(2005) results, we found that the accumulation of organization

capital is associated with investment in R&D assets and

marketing assets. Using these results, we measured the

contribution of organization capital to the conventional TFP

growth. The estimation results implied that the growth of

organization capital did not have significant effects on

productivity growth.