My empirical results show that the
former specification can summarize the data quite well by using a measure of institutional technology and
treating the capital–output ratio as part of the regression constant. This reinterpretation of the cross-country
Solow model provides an implication for empirical studies of international trade. Harrod-neutral technology
differences, as presumed by the Solow model, can explain why countries have different factor intensities and
may end up in different cones of specialization.