Comments to: “Identifying R&D Shortfalls in LDC” Andrés Rodriguez-Clare Rodrigo Fuentes, Central Bank of Chile Barcelona, June 2005

Issues that I liked: –Technological improvement generates level- rather than growth rate effects –Several plausible hypotheses are checked –Policy implications are carefully derived Comments –Hard to read –Distortions are important. How to include them? –Trade should affect the free flow of ideas –Conjectures and policy implications

TFP is the result of accumulation but also of complementarity of good policies and good institutions Distortions are important. Are they properly included in the paper? Meaning of z=1.1 for the case of Chile? The parameter ε should depend on trade distortions (Edwards, 1992, Coe and Helpman, 1995, Keller, 1998) Natural resources matters: mining sector is the most K-intensive sector

Source: Calderón and Fuentes, 2005

Source: Fuentes and Mies (2005) based on an index constructed by the World Bank. It includes literacy rate, and formal education enrollment

Quality of Education Kernel Distribution Source: Constructed by Mies and Fuentes (2005) based on WDI Index

Quality of Education Source: Fuentes and Mies (2005)

Source: Fuentes and Mies (2005) based on World Bank Data

Conjectures –Credit market. Large companies do have access to credit –Lack of human resources. Quality of education –Policies and institutions. Private sector and research institutions collaboration. Policies implications –Domestic versus international spillovers –The role of trade and financial policies –What to do in Chile and other LDC? There is not a unique policy rule

Comments to: “Patenting and R&D: A Global View” M. Bosch, D. Lederman, W. Maloney Rodrigo Fuentes, Central Bank of Chile Barcelona, June 2005

This paper –Empirical approach to determinants of innovation output, using US patents granted data –Empirical strategy is carefully implemented Comments –Main result: long run elasticity equal to one for developed economies –Relation to previous paper? –Incentives to invest in R&D in LDC: measurement error of return to R&D –Check of robustness

Main result: surprisingly high long-run elasticity of patents respect to R&D for DC Is this compatible with idea of externalities and spillovers? Romer (1986) assumes increasing returns in the production of consumption good, but strong diminishing returns in the production of knowledge The previous paper argues in favor of the importance of externalities, the findings of this one cannot be placed within a theoretical growth model with externalities

Incentives for the private sector to invest in R&D may not be related to obtain a patent in the US: –the target could be the domestic market or –the adaptation of new technology The final section is quite important. It seems that the inclusion of NIS variable reduces the long-term elasticity

Suggestions: –It would be informative to present the elasticity and the standard error for some specific countries –Expected to see an estimation with the interaction between export to US and R&D variables