Recent literature on the role of patents in shaping incumbent/entrant competition shows mixed evidence: on one hand, patents can dis-courage entry into markets, and on the other they may encourage potential entrants by increasing the profitability from research and development. The increasing use of patents as strategic weapons motivates this investigation of the impact of innovation on competition. We use a panel probit model to study the impact of a firm’s own patents and incumbents’ patents in the decision to launch new products in the US pharmaceutical cardiovascular submarkets over the period 1988-1998. Our results show that the number of a firm’s own lagged patents encourages entry, while incumbents’ patents have countervailing effects: the initial stock of patents discourages entry, but more recent patents promote entry by opening new technological opportunities.
Entry and patents: Evidence from the U.S. cardiovascular pharmaceutical sector / DI IORIO, Francesca; Letizia Giorgetti, Maria. - (2018). (Intervento presentato al convegno 86th International Atlantic Economic Conference tenutosi a New York, USA nel October 11 - 14, 2018).
Entry and patents: Evidence from the U.S. cardiovascular pharmaceutical sector
Francesca Di Iorio;
2018
Abstract
Recent literature on the role of patents in shaping incumbent/entrant competition shows mixed evidence: on one hand, patents can dis-courage entry into markets, and on the other they may encourage potential entrants by increasing the profitability from research and development. The increasing use of patents as strategic weapons motivates this investigation of the impact of innovation on competition. We use a panel probit model to study the impact of a firm’s own patents and incumbents’ patents in the decision to launch new products in the US pharmaceutical cardiovascular submarkets over the period 1988-1998. Our results show that the number of a firm’s own lagged patents encourages entry, while incumbents’ patents have countervailing effects: the initial stock of patents discourages entry, but more recent patents promote entry by opening new technological opportunities.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
