Tony Billings and Cedric Knott accepted for publication in International Trade Journal

Mike Ilitch School of Business Professor of Accounting Tony Billings and Adjunct Faculty Member Cedric Knott have had an article accepted for publication in the International Trade Journal, which publishes research on aspects of international trade such as international trade policy and theory, multilateral trade regimes and open economy macroeconomics.

The article, “A Multiasset and Country Analysis of Capital−Output Ratios,” was co-authored by Buagu Musazi (Morgan State University, Baltimore).


Several studies have considered factors influencing output differences among countries, including Nell and Thirlwall (2017), Oberfield (2013), Sandleris and Wright (2014), and Nell and Thirlwall (2014), and reported that factors such as education of the workforce, capital allocation and taxes, and business profits partly explain capital−output differences. Unlike prior studies, our study disaggregates capital investment into unique categories for nine major industrialized nations during the 1998–2016 period. Moreover, we examine output differences as a joint function of both tax and nontax factors in light of changing demographics and political environment in the major industrialized nations. Using OLS regression based on a sample of 1,026 observations consisting of six capital investment categories during 1998–2016 and after controlling for potential confounding factors, we show that capital−output ratios are a positive function of the education level of the workforce and R&D intensity and a decreasing function of the tax burden on business profits and the cost of capital. Among the countries studied, China, the United Kingdom, Italy, and India appear to be among the most efficient in terms of capital output for the several capital investment categories examined. Conversely, Canada, Japan, and the United States were the least productive users of capital investment in producing output. 

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