Intangible Capital Investment, Value Creation And Economic Growth Patterns

World experience of countries'economic growth shows that, following countries'economic growth, intangible capital is playing more and more prominent role to the economic growth. The economic growth pattern is increasingly dependent on the intangible capital investment. Firstly, for many investments in intangible capital, long return period as well as high risks, only when economic growth reaches a certain height and a certain scale, can make it possible to implement the massive intangible capital investment. Secondly, with the ceaseless investment of production elements, economic activities have accumulated large amount of physical assets. Due to the influence of diminishing marginal capital gains, both investment in physical capital and the utilization efficiency of the physical assets stock descend. To improve the efficiency of investment in physical capital and its utilization efficiency, we must increase investment in intangible capital. Thirdly, although investment in intangible capital is increasing, most of them have not been driven into capitalization according to traditional accounting system, a large number of intangible capital investments were reckoned neither in intangible capital stock nor in output measurement. Therefore, the total measure of economy, contribution of total factor productivity and the economic growth pattern has suffered the influence. In a word, reckoning intangible capital investment in total measure of economy, comprehensively understanding the influence of intangible capital investment on economic growth, investment efficiency and the mode of economic growth, have momentous significance both in theory and in policy.Based on this, this paper will study the status of China's intangible capital investment and its effect on efficiency of investment and changes in the mode of economic growth. In the beginning, this paper studies the status and characters of China's intangible capital investment. Then, based on having sufficiently comprehended the existent theoretical research and calculation method of physical capital investment and its stock, this paper acquires a series of constant data on each province's intangible capital investment and its stock. Depending on these data, the paper makes experience study on the effect of intangible capital investment on total factors productivity growth, investment efficiency, economic value increment as well as changes in the mode of economic growth, according to Solow's source of economic growth theory.The conclusions of this paper are as follows: Firstly, through the sub-cluster analysis on changes of provincial total factors productivity, we find that, changes of provincial intangible capital stock make notable effect on its total factors productivity change. It means that, we can use the former to complain the latter commendably. Secondly, there is marked negative correlation between changes of provincial intangible capital stock and capital output ratio & marginal capital output ratio (this two ratios represent efficiency of capital investment). Generally speaking, in a province where the change of intangible capital stock is at a lower level, changes of capital output ratio & marginal capital output ratio are greater, indicating lower investment efficiency, vice versa. Thirdly, analysis in the relationship between change of intangible capital stock and economic value increment ratio shows notable positive correlation. The higher level a province's change ratio of intangible capital stock reaches, the higher level economic value increment ratio the province gains. Lastly,the coefficient determination of changes in the mode of economic growth, which is calculated depending on the region total output value that including investment of intangible capital, is not obviously different to these based on the region total output value without investment of intangible capital. This conclusion shows that, for China's low level investment in intangible capital and small scale of intangible capital stock, intangible capital investment has not been significant to the improvement of China's economic growth mode, it has not change the mode of China's economic growth.In our country, although the provincial investments of intangible capital are still at low level and the scales of intangible capital stock are still small, this stock has already shown positive effect on increasing total factor productivity, investment efficiency and the ratio of economic growth. In present stage,increasing investment in intangible capital still can not play a fateful role in changing the mode of economic growth, but its positive effect is unassailable. Therefore, when the scale of economic growth reaches a certain level, increasing the investment in intangible capital will show great significance and effect to the economic growth.