Economic Freedom and the Impact of Technology on Productivity

Abstract

A well-developed body of literature has detected positive effects of technology investments on economic growth. We contribute to this literature by studying the joint effects of technology and economic freedom on economic growth. Using two different time points, 1990 and 2000, and a sample of over 100 countries, we find that economic freedom enhances the effect of technology on economic growth. In fact, we find that the standalone effect of freedom is not as large as its interactive effect with technology.