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Absorptive Capacity

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The idea that the productivity of new investment is a declining function of the rate of investment – the concept labelled ‘absorptive capacity’ – has attracted attention in development economics because of its implications as a constraint on growth.


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This chapter was originally published in The New Palgrave: A Dictionary of Economics, 1st edition, 1987. Edited by John Eatwell, Murray Milgate and Peter Newman

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Eckaus, R.S. (1987). Absorptive Capacity. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London.

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  • Publisher Name: Palgrave Macmillan, London

  • Online ISBN: 978-1-349-95121-5

  • eBook Packages: Springer Reference Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences

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