TY - JOUR AU - Cheung, Yin-Wong AU - Dooley, Michael P AU - Sushko, Vladyslav TI - Investment and Growth in Rich and Poor Countries JF - National Bureau of Economic Research Working Paper Series VL - No. 17788 PY - 2012 Y2 - January 2012 DO - 10.3386/w17788 UR - http://www.nber.org/papers/w17788 L1 - http://www.nber.org/papers/w17788.pdf N1 - Author contact info: Yin-Wong Cheung Department of Economics and Finance City University of Hong Kong Hong Kong E-Mail: yicheung@cityu.edu.hk Michael P. Dooley Department of Economics Engineering II University of California, Santa Cruz Santa Cruz, CA 95064 Tel: 831/459 3662 Fax: 831/459-5077 E-Mail: MPD@UCSC.EDU Vlad Sushko Bank for International Settlements Centralbahnplatz 2 4002 Basel Switzerland E-Mail: vladyslav.sushko@bis.org AB - This paper revisits the association between investment and growth. The empirical findings highlight substantial heterogeneity for the effect of investment on growth and suggest a possible negative association. Results based on a battery of cross-sectional and time-series regressions show that the link between investment and growth has weakened over time and that investment in high-income countries is more likely to have a negative effect on growth. The adverse effect for high-income countries appears to have increased over time. An implication is that uphill capital flows could be associated with negative or zero returns. The result is robust to the presence of control variables that are commonly included in growth studies. ER -