Importing more capital goods boosts income growth in developing countries.
Using more imported capital goods than domestic ones for building things can make a country's income grow faster. Data from many countries between 1960 and 1985 show that when countries use more imported capital goods for investment, their income per person goes up. This is especially true for developing countries. So, not just how much capital a country has, but also where that capital comes from, is important for making the economy grow.