Entry and Patents: Evidence from the US Cardiovascular Pharmaceutical Sector

Francesca Di Iorio and Maria Letizia Giorgetti ()

Departmental Working Papers from Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano

Abstract: The goal of this study is to analyze the impact of innovation on entry, that is, the launch of a new product, for some specific three digit cardiovascular sector in the US pharmaceutical market, for the period 1988-1998. We have a panel data obtained by crossing-check IMS Health Data on sales with data on patents for companies selling products into those submarkets. We estimate a logit panel model by controlling for endogeneity, adopting submarket and firm specific variables. Our results show that own patents don’t clearly encourage entry, while patent holdings by incumbents have contrasting effects: on one hand the initial stock act as a barrier to entry, on the other hand they promote entry through the opening of new technological opportunities.

Keywords: Entry; Patents; Panel data; Logit model; Random effects (search for similar items in EconPapers)
JEL-codes: C11 C23 C25 L11 L65 (search for similar items in EconPapers)
Date: 2017-04-28
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Persistent link: https://EconPapers.repec.org/RePEc:mil:wpdepa:2017-07

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