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This paper shows that combining the semi-endogenous and the fully endogenous growth mechanisms with a general CES aggregator, either growth process can prevail in the balanced growth path depending on their degree of complementarity/substitutability. Policy-induced long-run economic switches to the fully endogenous steady state as the R&D employment ratio surpasses a positive threshold are possible if the two growth engines are gross substitutes. JEL classi…cation: O30, O40.

This article applies Oaxaca-Blinder and Shorrocks-Shapley decomposition techniques to a logistic diffusion model in order to explain the differences in Total Factor Productivity Growth (TFPG) in European Union (EU) countries for the period 1950-2011. Human capital has a dual positive effect on TFPG by boosting innovation and increasing the catch-up capacity of countries to absorb and imitate foreign technologies. Our results show that there are statistically significant differences in the intensity of these effects between high and low average income EU countries, while there are not between euro and non-euro countries. The mean difference in technical change between high and low-income EU countries is largely the result of three factors. The first is the higher average foreign technology assimilation capacity of low income countries. This is particularly true because they are further from the technological frontier and are able to benefit from the advantage of backwardness. The second is the higher direct effect of human capital on technical change in these countries, while the third factor is the higher slowdown role of proximity in them.

In this paper we analyze the main characteristic features of foreign direct investment (FDI) directed to Spanish manufacturing, both across industries and through time, for the years 1986-1992. During this period, Spain was one of the most important recipients of FDI inflows in the world, coinciding with the first years of integration into the European Union and the prospects about the completion of the Single European Market by 1992. To this end, a relative FDI measure is related to several industry indicators, as well as to some macroeconomic variables, which allows us to obtain a general characterization of FDI in Spanish manufacturing over that period.

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