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Equipment Investment and Growth In Developing Countries

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  • Hendricks, Lutz A.

Abstract

Abstract Currently Unavailable. Differences in equipment investment or equipment prices account for large variations in growth rates across countries. An important task is to understand the economic mechanism underlying the equipment-growth nexus and its policy implications. In order to study this issue, this paper develops a model in which growth is driven by the adoption of technologies that are embodied in equipment. I show that this model can quantitatively account for the observed cross-country relationships between equipment investment, equipment prices, and growth. I find that the competitive equilibrium is characterized by inefficiently low levels of learning and too slow growth and study which policies are able to remedy this inefficiency.

Suggested Citation

  • Hendricks, Lutz A., 2000. "Equipment Investment and Growth In Developing Countries," Staff General Research Papers Archive 11932, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genres:11932
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Mateos-Planas, Xavier, 2000. "Schooling and distortions in a vintage capital model," Discussion Paper Series In Economics And Econometrics 30, Economics Division, School of Social Sciences, University of Southampton.
    2. Mateos-Planas, Xavier, 2000. "Schooling and distortions in a vintage capital model," Discussion Paper Series In Economics And Econometrics 0030, Economics Division, School of Social Sciences, University of Southampton.
    3. Agenor,Pierre-Richard, 2003. "The mini-integrated macroeconomic model for poverty analysis : a framework for analyzing the unemployment and poverty effects of fiscal and labor market reforms," Policy Research Working Paper Series 3067, The World Bank.
    4. repec:fth:sotoec:0030 is not listed on IDEAS
    5. M. Herrerias & Vicente Orts, 2012. "Equipment investment, output and productivity in China," Empirical Economics, Springer, pages 181-207.
    6. Arvind Virmani, 2004. "Sources of India's economic growth: trends in total factor productivity," Indian Council for Research on International Economic Relations, New Delhi Working Papers 131, Indian Council for Research on International Economic Relations, New Delhi, India.
    7. Agénor, Pierre-Richard & Bayraktar, Nihal & El Aynaoui, Karim, 2008. "Roads out of poverty? Assessing the links between aid, public investment, growth, and poverty reduction," Journal of Development Economics, Elsevier, pages 277-295.
    8. Mateos-Planas, Xavier, 2000. "Technology adoption with finite horizons," Discussion Paper Series In Economics And Econometrics 0033, Economics Division, School of Social Sciences, University of Southampton.
    9. Ricardo Azevedo Araujo & Gilberto Tadeu Lima, 2008. "Investment-Specific Technological Change, Investment Sectoral Allocation and Human Capital Accumulation in a Model of Export-Led Growth," Anais do XXXVI Encontro Nacional de Economia [Proceedings of the 36th Brazilian Economics Meeting] 200807211332520, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
    10. Araujo, Ricardo Azevedo, 2011. "Lyapunov Stability in an Evolutionary Game Theory Model of the Labor Market," MPRA Paper 29957, University Library of Munich, Germany.
    11. Araujo, Ricardo Azevedo & Lima, Gilberto Tadeu, 2011. "Embodied technological change, capital sectoral allocation and export-led growth," MPRA Paper 29810, University Library of Munich, Germany.
    12. Berthold Herrendorf & Arilton Teixeira, 2011. "Barriers To Entry And Development," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(2), pages 573-602, May.
    13. Dulleck, Uwe & Foster, Neil, 2008. "Imported Equipment, Human Capital and Economic Growth in Developing Countries," Economic Analysis and Policy, Elsevier, vol. 38(2), pages 233-250, September.
    14. Bender, Dieter & Loewenstein, Wilhelm, 2014. "Immiserizing Capital Flows to Developing Countries," IEE Working Papers 201, Institut fuer Entwicklungsforschung und Entwicklungspolitik, Ruhr-Universitaet Bochum.
    15. Arvind Virmani, 2004. "India's economic growth: From socialist rate of growth to Bharatiya rate of growth," Indian Council for Research on International Economic Relations, New Delhi Working Papers 122, Indian Council for Research on International Economic Relations, New Delhi, India.
    16. Ricardo Azevedo Araujo & Gilberto Tadeu Lima, 2012. "Capital-Specific Technological Change and Human Capital Accumulation in a Model of Export-Led Growth," PSL Quarterly Review, Economia civile, vol. 65(262), pages 275-311.
    17. Stephen L. Parente, 2000. "Learning-by-Using and the Switch to Better Machines," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(4), pages 675-703, October.
    18. Xavier Mateos-Planas, 2001. "Schooling and Distortions in a Vintage Capital Model," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 4(1), pages 127-158, January.
    19. Feichtinger, Gustav & Hartl, Richard F. & Kort, Peter M. & Veliov, Vladimir M., 2006. "Capital accumulation under technological progress and learning: A vintage capital approach," European Journal of Operational Research, Elsevier, vol. 172(1), pages 293-310, July.
    20. Mateos-Planas, Xavier, 2000. "Technology adoption with finite horizons," Discussion Paper Series In Economics And Econometrics 33, Economics Division, School of Social Sciences, University of Southampton.
    21. Varouj Aivazian & Dipak Mazumdar & Eric Santor, 2003. "Financial Constraints and Investment: Assessing the Impact of a World Bank Loan Program on Small and Medium-Sized Enterprises in Sri Lanka," Staff Working Papers 03-37, Bank of Canada.

    More about this item

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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