Investment (gross fixed capital formation) in two- and three-digit international standard industrial classification (ISIC) disaggregated manufacturing sectors are used in the empirical part of the study. 1 Investment data consist of two series: total investment and investment in machinery and equipment. Data are cross-sectional (across sectors), annual time-series data from the years 1979 to 1993 for each country. Sectoral level data are collected by the Economic Analysis and Statistics Division of the Directorate for Science, Technology, and Industry of the Organization for Economic Cooperation and Development (OECD) Secretariat under the name of "Industrial Structure Statistics."