Economics at your fingertips  

Research and Market Structure: Evidence from A Pathogenic Outbreak

Mayank Aggarwal, Anindya Chakrabarti, Chirantan Chatterjee and Matthew Higgins ()

No 28840, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Do upstream research shocks directly and contemporaneously impact related but disconnected downstream product markets? We explore this question using a natural experiment involving the New Delhi Metallo-Beta-Lactamase 1 superbug pathogenic outbreak in India. Using a difference-in-differences strategy, we find that this upstream research shock caused multinational firms selling antibiotics in India to reduce their market exposure. Surprisingly, this void was filled by domestic Indian firms. These results are bolstered by a concurrent decline in multinational prescriptions of focal products by Indian physicians relative to prescriptions for domestic firm products. We present a stylized model building on a Cournot differentiated duopoly model to explain these heterogeneous responses. Results are robust to alternate control groups, including synthetic controls, as well as placebo testing. Implications for health policy and innovation policy are discussed.

JEL-codes: I18 L1 L65 (search for similar items in EconPapers)
Date: 2021-05
New Economics Papers: this item is included in nep-com
Note: PR
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at Free access is also available to older working papers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This working paper can be ordered from
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

Page updated 2021-08-11
Handle: RePEc:nbr:nberwo:28840