This paper investigates Samuelson's (JEP, 2004) argument that technical progress of the trade partner may hurt the home country. We illustrate this prospect in a simple Ricardian model for sitations with outward knowledge spillovers. Within this framework Samuelson's "Act II" effects may occur....

The present contribution tests whether countries can be pooled when studying the financegrowth nexus. Overall, our results point toward a ‘pragmatic’ positive answer, though considerable heterogeneity is present among developing countries.