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important and R&D-intensive industries: Semiconductors and Pharmaceuticals. I employ two measures of a firm's R&D performance …&D expenditures. The former is a measure of the average quality of a firm's patents, and the latter is a measure of total R&D output … obtained per dollar of investments. I find that the average quality of patents (citations received per patent) falls with firm …
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We analyse how a patent-holding pharmaceutical firm may strategically use advertising of existing drugs to affect R&D investments in new (differentiated) drugs, and thereby affect the probability distribution of future market structures in the industry. Within a fairly general model framework,...
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