Absorptive capability and economic growth: how do countries catch-up?

This paper empirically investigates the importance of technological catch-up in explaining productivity growth in a sample countries since the 1960s. New proxies for a country's absorptive capability – based on data for students studying abroad, telecommunications and publications – are used. Various regression models are estimated, with both GDP per worker growth and multifactor productivity growth as dependent variables. A specific focus is on influential observations and the robustness of results. The results indicate that absorptive capability is a factor in explaining growth, with the most robust finding that countries with relatively high numbers of students studying science or engineering abroad experience faster subsequent growth. However, the paper also indicates that the significance of coefficients varies across specifications and samples, suggesting caution in focusing on individual results.