Technological adoption, human capital and economic growth: Theory and evidence

The thesis of this dissertation is that technological adoption and human capital are essential mechanisms that propagate growth, and that these mechanisms are necessary and sufficient for understanding the income diversity puzzle.;In the first essay, I construct a model in which growth is determined by a combination of two engines: human capital accumulation and technology adoption. The main suggestion of this model is that human capital and technological backwardness are each necessary but only the combination of the two is sufficient for rapid growth. Enhanced absorption capability, which can be made possible with higher levels of human capital, make it easier for a developing country to take advantage of technological adoption and break out of poverty traps.;The second essay investigates the relationship between technological growth and human capital. The recent R&D growth literature conjectures that technological growth is either linearly related to the level of human capital, or that it is related to an exogenously given rate of growth of human capital. The primary result of this study, and the main contribution of this essay is that the relationship between technological growth and human capital is nonlinear and can be characterized as hump-shaped.;In the third essay, a modified R&D-based model is proposed to account for the new evidence presented in the second essay. The three main features of this modified model are: (i) It preserves the appealing structure of the Basic R&D growth model (i.e. Romer (1990)). (ii) It is consistent with the Jones (1995a, 1995b) prediction. (iii) It is consistent with new empirical evidence. In this model technology transfers play a crucial role in the growth process of developing countries.;The fourth essay makes an attempt to resolve the main shortcoming of the existing R&D-based models which is the assumption of exogenous human capital. In this essay human capital is endogenized by allowing economic agents to allocate human capital across three sectors of production: the final good sector, the technology sector and the knowledge sector. It is shown that the relevant optimization problem has a closed form solution.