Why does the productivity of investment vary across countries?

Kevin Nell and Anthony Thirlwall

PSL Quarterly Review, 2017, vol. 70, issue 282, 213-245

Abstract: In 'new growth theory' equations that include the investment ratio, all other variables included are determinants of the productivity of investment. We convert a new growth theory equation into a productivity of investment equation by dividing the equation through by the investment ratio. We take a sample of 84 developed and developing countries over the period 1980 to 2011, and examine the importance of 19 potential variables that might affect the productivity of investment, using a general-to-specific model selection algorithm. Education, export growth, macroeconomic stability, political rights, geography and government expenditure turn out to be the most important determinants. There is no evidence of diminishing returns to investment, so that investment matters for long run growth.

Keywords: New growth theory; Investment; Productivity of investment; Cross-country growth regressions (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/14005/13760 (application/pdf)

Related works:
Working Paper: Why Does the Productivity of Investment Vary Across Countries? (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:psl:pslqrr:2017:31

Ordering information: This journal article can be ordered from
http://www.pslquarterlyreview.info

Access Statistics for this article

PSL Quarterly Review is currently edited by Alessandro Roncaglia and Carlo D'Ippoliti

More articles in PSL Quarterly Review from Economia civile
Bibliographic data for series maintained by Carlo D'Ippoliti ().