Openness appears to have a strong impact on economic growth especially in DCs, which typically exhibit a high share of physical capital in factor income and a low share of labor. In the neoclassical growth model with partial capital mobility, physical capital's share in factor income determines...

Some recent empirical studies deny any direct performance effects of measures of geography and conclude that institutions trump all other potential determinants of development. For given effects of institutional quality, our empirical results indicate quantitatively important direct negative...