| 来源类型 | Working Paper |
| 规范类型 | 报告 |
| DOI | 10.3386/w28964 |
| 来源ID | Working Paper 28964 |
| Paying off the Competition: Market Power and Innovation Incentives | |
| Xuelin Li; Andrew W. Lo; Richard T. Thakor | |
| 发表日期 | 2021-06-28 |
| 出版年 | 2021 |
| 语种 | 英语 |
| 摘要 | How does a firm’s market power in existing products affect its incentives to innovate? We explore this fundamental question using granular project-level and firm-level data from the pharmaceutical industry, focusing on a particular mechanism through which incumbent firms maintain their market power: “reverse payment” or “pay-for-delay” agreements to delay the market entry of competitors. We first show that when firms are unfettered in their use of “pay-for-delay” agreements, they reduce their innovation activities in response to the potential entry of direct competitors. We then examine a legal ruling that subjected these agreements to antitrust litigation, thereby reducing the incentive to enter them. After the ruling, incumbent firms increased their net innovation activities in response to competitive entry. These effects center on firms with products that are more directly affected by competition. However, at the product therapeutic area level, we find a reduction in innovation by new entrants after the ruling in response to increased competition. Overall, these results are consistent with firms having reduced incentives to innovate when they are able to maintain their market power, highlighting a specific channel through which this occurs. |
| 主题 | Microeconomics ; Market Structure and Distribution ; Financial Economics ; Corporate Finance ; Other ; Law and Economics ; Industrial Organization ; Antitrust ; Industry Studies ; Development and Growth ; Innovation and R& ; D |
| URL | https://www.nber.org/papers/w28964 |
| 来源智库 | National Bureau of Economic Research (United States) |
| 引用统计 | |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/586638 |
| 推荐引用方式 GB/T 7714 | Xuelin Li,Andrew W. Lo,Richard T. Thakor. Paying off the Competition: Market Power and Innovation Incentives. 2021. |
| 条目包含的文件 | ||||||
| 文件名称/大小 | 资源类型 | 版本类型 | 开放类型 | 使用许可 | ||
| w28964.pdf（588KB） | 智库出版物 | 限制开放 | CC BY-NC-SA | 浏览 | ||
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