Discussion of Claudio Petti's research started with an active debate regarding the methodological and data approaches that are best applied to evaluation of R&D policy effectiveness. First, Viroj Jienwatcharamongkhol noted that the effects of R&D on innovation output are inherently dynamic in nature. Thus, the paper's use of cross-section data is restrictive because of its inability to capture any dynamic effects. Jienwatcharamongkhol also observed, however, that the coefficient magnitudes estimated even in this cross-section setting were economically large. Next, Joakim Gullstrand speculated that firm productivity shocks may mediate the correlation between R&D and output because a positive firm productivity shock may simultaneously encourage a firm to increase its R&D efforts and to increase its output. If so, cross-section regressions based on correlations between R&D and output will overstate the causal effect of firm R&D efforts on the expansion of firm output, and the estimates in the project should be viewed...

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