Learning from successes and failures in pharmaceutical R&D

Jing-Yuan Chiou, Laura Magazzini, Fabio Pammolli () and Massimo Riccaboni ()
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Jing-Yuan Chiou: National Taipei University

Journal of Evolutionary Economics, 2016, vol. 26, issue 2, No 2, 290 pages

Abstract: Abstract In this paper, we build a cumulative innovation model to understand the role of both success and failure in the learning dynamics that characterize pharmaceutical R&D. We test the prediction of our model by means of a unique dataset that combines patent information with R&D projects, thus distinguishing patents related to successfully marketed products from those covering candidate drugs that failed in clinical trials. Results confirm model predictions showing that patents associated with successfully completed projects receive more citations than those associated with failed projects. However, we also show that failed projects can be in turn cited more often than patents lacking clinical or preclinical information. We further explore the ‘black box’ of innovation, providing evidence that both successes and failures contribute to R&D investment decisions and knowledge dynamics in science-driven sectors.

Keywords: R&D competition; Pharmaceutical industry; Knowledge flows; Technological trajectories (search for similar items in EconPapers)
JEL-codes: D23 D83 O34 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s00191-015-0439-z

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