Semi-endogenous versus fully endogenous growth theory: A sectoral approach

This paper analyses the validity of second generation endogenous growth theories for six developed countries and ten manufacturing sectors over the period 1979-2001, applying modern tests and estimation procedures for the treatment of panel data. The basic autonomous innovation-driven model is extended to include international technology transfer and different measures of absorptive capacity. The estimates give great support to semi-endogenous growth theory. Furthermore, Schumpeterian or fully-endogenous growth theory has some support in the high impact of distance to the frontier variable which represents autonomous technology transfer.