Intangible Capital Meets Skilled Labor: The Implications for Productivity Dynamics

We study how the synergy between intangible capital and skilled labor shapes firm-level productivity. Using multiple measures of skilled labor, including Artificial Intelligence (AI)-skilled workers and inventors, we show that this complementarity is stronger in larger firms due to economies of scale. To validate the mechanism, we exploit the 2015 release of Google TensorFlow as a plausibly exogenous shock to AI effectiveness and find that productivity gains are concentrated in firms with both high intangible capital and AI-skilled labor. A firm-level general equilibrium model with scale-dependent complementarity supports our empirical results, highlighting this synergy as a driver of productivity dispersion.