Firm Scope and Spillovers from New Product Innovation: Evidence from Medical Devices

Matthew Grennan, Charu Gupta and Mara Lederman

No 25183, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: When firms span related product categories, spillovers across categories become central to firm strategy and industrial policy, due to their potential to foreclose competition and affect innovation incentives. We exploit major new product innovations in one medical device category, and detailed sales data across related categories, to develop a causal research design for spillovers at the customer level. We find evidence of spillovers, primarily associated with complementarities in usage. These spillovers imply large benefits to multi- vs. single-category firms, accounting for nearly one quarter of sales in the complimentary category (equivalent to four percent of revenue in the focal category).

JEL-codes: D22 D4 D43 D62 I11 K21 L1 L13 L25 L38 L4 L5 M2 M21 O25 O31 O32 O33 (search for similar items in EconPapers)
Date: 2018-10
New Economics Papers: this item is included in nep-bec, nep-com, nep-eff, nep-ent, nep-ino, nep-law, nep-sbm, nep-tid and nep-ure
Note: EH IO PR
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