Twenty years have passed since economists first emphasized the "intangible capital" aspects of advertising. According to this view, ". . . consumers tend to forget brands and continuous advertising is needed to maintain a given rate of sales. Thus, advertising expenditures can be viewed as a capital good that depreciates over time and needs maintenance and repair [22, p. 197]." More recently, Weiss [25], among others, has suggested that research and devel opment, R&D, costs might also be capitalized as such expenditures ". . . yield benefits mainly in the future [25, p. 421]." Unfortunately, most analyses of the intangible capital issue have been limited to advertising largely because no comprehensive data on R&D were available until quite recently. However, important recent theoretical contributions on the topic and improvements in data availability now make it possible more completely to consider the intang ible capital aspects of both advertising and R&D expenditures.