Comments on Eaton and Kortum Innovation, Diffusion and Trade

1
Comments on Eaton and Kortum Innovation,
Diffusion and Trade

• Eduardo Morón
• Universidad del Pacifico
• RD and Innovation in the Development Process
  Conference
• Universitat Pompeu-Fabra, Barcelona
• June 9-11, 2005

2
Outline

• What I knew before reading the paper
• What I expect to learn
• What I have actually learn
• Some remaining doubts

3
What I knew before reading the paper
4
My prior view before reading the paper

• From a developing country perspective
• We are not producers of technology
• We either adopt or adapt new technologies
• Our main source of increases in TFP comes in the
  form of embedded technology in imports.

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What I expect to learn

• Is there a different way to enhance our TFP
  growth?
• Which is the most effective road
• Invest in basic RD.
• Invest in (the development of) a specific
  technology.
• Invest to enhance our abilities to adapt new
  technologies available.

6
What I have actually learn

• The paper discusses how openness affect the
  incentive to innovate.
• But it is the same effect for the North and the
  South?
• Developing countries face two roads in their
  effort to increase TFP
• Open up their economies
• Lower barriers to diffusion of ideas

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Some remaining doubts

• From a policy perspective
• Which are the main barriers to diffusion of
  ideas?
• Patent protection legislation?
• The paper does not address this topic.

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Some remaining doubts

• From a theoretical perspective
• The stylized fact is that patterns of research
  specialization has remained constant in the last
  century.
• Why we need so many free parameters?