Endogenous Growth Theory Under Scrutiny: Reassessing Total Factor Productivity Decomposition in the Context of Intangible Capital Accumulation and Secular Stagnation

Abstract

Contemporary endogenous growth frameworks have long attributed macroeconomic expansion to measurable capital deepening and technological spillovers; however, the accelerating intangibilization of productive assets challenges foundational assumptions embedded within Solow residual decompositions. This study employs a panel cointegration approach across 47 OECD and emerging market economies (2000–2023), augmenting the standard growth accounting framework with proprietary intangible capital proxies derived from harmonized national accounts. Our findings reveal a statistically significant divergence between conventionally estimated total factor productivity and adjusted productivity indices that incorporate organizational capital, knowledge stocks, and data-as-an-asset classifications. The results indicate that secular stagnation narratives are partly artifacts of measurement misspecification rather than genuine productivity exhaustion, with intangible-adjusted TFP recovering approximately 31% of the so-called "missing growth." Policy implications for capital taxation, R&D incentive architecture, and national accounting reform are discussed.