Persistence of innovation, technological change and quality-adjusted patents in the US Pharmaceutical industry

Gautier Duflos ()
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Gautier Duflos: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CREST-LEI - ENPC - École nationale des ponts et chaussées

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Abstract: This paper analyzes American pharmaceutical firms' persistence in innovating prior to the wave of mergers and acquisitions that accompanied the "Biotech revolution". We evaluate the impact of past innovative activity on firms' innovation propensities using a non-linear GMM estimator for exponential models that allows for predetermined regressors and linear feedback. We find that innovative activity at the firm level depends strongly on the technological importance of past innovations. In particular, breakthroughs depend largely on past innovations' scope, and this effect is likely to deter further pioneering behaviors rather than strengthen incentives to invest on non cumulative R&D. The results also shed light on the importance of small firms for the technological change in pharmaceuticals, and suggest that large firms may persist in using patents strategically to retain sales.

Keywords: Patent citations; pharmaceutical industry; persistence in innovation; industrie pharmaceutique; persistance à innover; Citations de brevets (search for similar items in EconPapers)
Date: 2006-01
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00113499v2
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Citations: View citations in EconPapers (4)

Published in 2006

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