The Capital Matthew Effect: Directed Technical Change and International Capital Flows

• 成果类型: Article; Early Access
• 署名作者: Su, Dan
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.70002
• 发表日期: 2025
• 关键词: financial development; comparative advantage; Global imbalances; GROWTH; WORLD; TECHNOLOGY; INEQUALITY; countries; rich; institutions

摘要

This study shows that technological specialization is one plausible driver of long-term international capital flows. Capital scarcity raises marginal returns but also steers countries toward capital-saving technologies. As a result, capital-rich countries adopt capital-complementary technologies and keep importing capital from poorer countries that favor capital-substitute innovations. This divergence force on capital allocation, which we name the capital Matthew effect, offsets convergence from diminishing returns. The mechanism offers a unified explanation for puzzles like the Lucas paradox and global imbalances. Finally, we provide both country-level and firm-level evidence supporting this new model mechanism.