The Role of Human Capital and FDI in Growth and Convergence Between EU Countries

The paper verifies whether the growth founded on the technological catching up, on which great part of the run-up of the European countries towards a common level of income per capita was based, is also practicable today given that in the EU countries that, compared to the others, present strong lags in terms of markets development, and income levels have entered. For this purpose, after having seen the limits of the analysis based on the absolute convergence predicted by the neoclassical model, the paper starts from the model of growth and catching up by Dowrick and Nguyen (1988) in order to arrive at the construction of a growth equation and conditional convergence that, holding account of the works by Romer (1986, 1990), Lucas (1988) and Mankiw, Romer and Weil (1992), allows us to estimate the role either of the technological catching up or of the growth determined by the investment of human capital in research and development, and by spillovers from foreign direct investment. These two new forces, united to the expansion of the employment rate, push towards growth giving greater impulse also to the technological catching-up.