Private Return to R&D Activities in Chile

Using a panel data of innovative Chilean firms, we obtain a private return for R&D expenditure over 30 percent during this decade. Despite the fact of being almost twice the return obtained for physical capital, results show that R&D expenditure causes contemporaneous negative impacts over firms profits suggesting that a learning process is in place. Nevertheless, after two years, the net effect is positive and may explain why private participation in research activities is still very low in Chile.