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Explaining differences in the productivity of investment across countries in the context of ‘new growth theory’

Nell, Kevin S., Thirlwall, A.P. (2017) Explaining differences in the productivity of investment across countries in the context of ‘new growth theory’. International Review of Applied Economics, 32 (2). pp. 163-194. ISSN 0269-2171. (doi:10.1080/02692171.2017.1333089) (KAR id:62052)

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Abstract

The purpose of this paper is to explain differences in the productivity of investment across 84 rich and poor countries over the period 1980–2011, and to test the orthodox neoclassical assumption of diminishing returns to capital. The productivity of investment is measured as the ratio of the long-run growth of GDP to a country’s gross investment ratio. Twenty potential determinants are considered using a generalto-specific model selection algorithm. Education, government consumption, geography, export growth, openness, political rights and macroeconomic instability are the most important variables. The data also suggest constant returns to capital, so investment and the determinants of productivity of investment differences matter for long-run growth.

Item Type: Article
DOI/Identification number: 10.1080/02692171.2017.1333089
Uncontrolled keywords: New growth theory, investment, productivity of investment, cross-country growth regression
Divisions: Faculties > Social Sciences > School of Economics
Depositing User: Anthony Thirlwall
Date Deposited: 13 Jun 2017 09:26 UTC
Last Modified: 17 Aug 2020 14:51 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/62052 (The current URI for this page, for reference purposes)
Thirlwall, A.P.: https://orcid.org/0000-0002-1661-2218
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