ECONOMIC GROWTH AND TECHNOLOGY DIFFUSION IN DEVELOPING COUNTRIES

Abstract

This paper aims to use the system-GMM estimation to fit an augmented Solow growth model with international technology diffusion variables. We also investigate whether the parameters of the model differ appreciably across subsamples of countries. The paper finds that foreign direct investment is a more important channel for technology transfer to developing countries than openness to international trade. Furthermore, the estimates indicate that the more rapidly technology transfer is made, the greater is the stock of human capital accumulated.