(Pre-print final draft. The paper was published in: Singapore Economic Review, Vol. 47, No. 1, 2002, pp. 89-100) Testing Different Classes of Endogenous Growth Models: Industry Evidence for the New Zealand Economy Hans-Jürgen Engelbrecht, * Department of Applied and International Economics, College of Business, Massey University, Palmerston North, New Zealand. Nathan McLellan, New Zealand Treasury, Wellington, New Zealand. ABSTRACT § The endogenous growth literature can be broadly separated into two classes of growth models: Rival human capital models and non-rival ‘idea’ models. Both classes differ in their positive and normative implications for growth. Following Klenow’s (1998) approach, this paper uses industry panel data to investigate which class of growth models might be the most appropriate for the New Zealand economy: Exogenous growth, or one of the two classes of endogenous growth models. In contrast to Klenow’s findings for the United States, in the New Zealand case rival human capital models seem more applicable, though none of the models correctly predicts all of the empirical relationships. Keywords: Growth, human capital, ideas, industry data, New Zealand JEL classification: O3; O41, O5 * Corresponding author. Tel.: 06 350 5799 5968; Facsimile: 06 350 5660; E-mail: H.Engelbrecht@massey.ac.nz § The views expressed in this paper are those of the authors and do not necessarily reflect those held by the New Zealand Treasury. The second-named author presented an earlier version of this paper at the Econometric Society’s Australasian Inaugural Intensive Workshop for Young Scholars, Waikato Management School, Hamilton, New Zealand, 9-10 July 2001. Comments from an anonymous referee are gratefully acknowledged. 1