Launch of a product and patents: evidence from the US cardiovascular pharmaceutical sector

Francesca Di Iorio and Maria Letizia Giorgietti ()
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Maria Letizia Giorgietti: Università di Milano

No 169, DEM Working Papers Series from University of Pavia, Department of Economics and Management

Abstract: Recent literature on the role of patents in shaping competition between incumbents and new entrants shows mixed evidence, as patents can discourage entry into markets but may also encourage potential entrants by increasing profitability from research and development. The increasing use of patents as strategic weapons motivates this investigation of the impact of innovation on competition. In a case study of US pharmaceutical cardiovascular submarkets over the period 1988-1998, we use a panel probit model to study the impact of a firm’s patents and rivals’ patents in the firm’s decision to launch new products. Our results show that the number of a firm’s lagged patents encourages the firm’s entry with new products, while rivals’ initial stock of patents discourages entry, but more recent patents promote entry by opening new technological opportunities.

Keywords: Entry; Patents; Panel data; Probit model; Submarkets (search for similar items in EconPapers)
JEL-codes: C11 C23 C25 L11 L65 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2019-02
New Economics Papers: this item is included in nep-bec, nep-com, nep-ent, nep-ind, nep-sbm and nep-tid
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http://dem-web.unipv.it/web/docs/dipeco/quad/ps/RePEc/pav/demwpp/DEMWP0169.pdf (application/pdf)

Related works:
Journal Article: Launch of a product and patents: evidence from the US cardiovascular pharmaceutical sector (2020)
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