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

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 Cummins's (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.