Essays on regional growth: Capital flows and technological differences across states

This thesis is composed of three closely related essays on growth and regional economics.;The first chapter of the thesis focuses on Hicks Neutral total factor productivity (HN-TFP) differences across states in the US. I find there are considerable differences in the level of technology across states. There are two main results from this chapter. In a growth accounting type decomposition of differences across states in the level of product per worker into differences in technology, physical and human capital I find that differences in technology account for around 70% of the observed difference, physical capital for 20% and human capital for 10%. The level of TFP has a significant positive relationship with the proportion of urban population, density of population in a state, coastline and proportion of the population of hispanic origin, while the proportion of the population under the poverty line and the proportion of African American population have a negative relationship. The level of TFP is also strongly related with industrial composition in a state.;The second chapter presents, for states within the US, calculations of the net proportion of foreign physical capital (PFK) in a state, that is, the difference between the physical capital employed in a state and the capital owned by residents of a state. It is found that states with higher levels of income per worker tend to be net exporters of capital, and that the PFK in a state has a positive significant relationship with the level of HN-TFP, and a negative significant relationship with the capital share. These relationships are explained by a model with perfect capital mobility, differences in technology, and a savings rate that increases with the level of income of an individual.;The third chapter presents a time series analysis of the adjustment of the physical capital stock to state idiosyncratic shocks, and how much of new investment in a state is financed with outside resources. It is found that physical capital adjusts more than labor to idiosyncratic shocks, and does so until rates of return change back to their original levels. On average, foreign capital accounts for 30% of new investment in a state.