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Investment-Specific Technical Change And Growth Around The World, Roberto M. Samaniego, Juliana Yu Sun

Research Collection School Of Economics

Investment-specific technical change (ISTC) contributes little to growth in most countries. This is because in many countries the investment process does not become notably more efficient over time. Still, cross-country differences in the contribution of ISTC to growth are significant. Differences in the rate of ISTC appear due to cross-country variation in the use of R&D intensive capital goods, as well as trade costs.