Importing technology

We look at disaggregated imports of various types of equipment to make inferences oncross-country differences in the composition of equipment investment. We make threecontributions. First, we document strikingly large differences in investment composition.Second, we explain the differences as being based on each equipment type’s degree ofcomplementarity with other factors whose abundance differs across countries. Third, we showthat the composition of capital has the potential to account for some of the large observeddifferences in TFP across countries.[...]