Policy makers need reliable estimates of direct costs of pharmaceutical R&D, in order to contain health-care costs and at the same time maintain a supportive environment for investment in research. This paper evaluates the application of parametric estimating methods to the late stage clinical...

We examine the role of spillover learning in shaping the value of exploratory versus incremental R&D. Using data from drug development, we show that novel drug candidates generate more knowledge spillovers than incremental ones. Despite being less likely to reach regulatory approval, they are...

What is the interaction between competition, R&D investments, and the financing choices of R&D-intensive firms? Motivated by existing theories, we hypothesize that as competition increases, R&D-intensive firms will: (1) increase R&D investment relative to assets-in-place that support existing...

The interaction between product market competition, R&D investment, and the financing choices of R&D-intensive firms on the development of innovative products is only partially understood. To motivate empirical hypotheses about this interaction, we develop a model which predicts that as...

Why do firms outsource research and development (R&D) for some products while conducting R&D in-house for similar ones? An innovating firm risks cannibalizing its existing products. The more profitable these products, the more the firm wants to limit cannibalization. We apply this logic to the...

With the recent liberalization of technology flows, changes in the pattern of domestic invention can be expected in Brazil. This paper models the decision of a firm to engage in innovative activity and to protect the results of that activity. Using a unique firm-level dataset collected for this...

One of the most difficult legal issues today involves settlements by which brand-name drug companies pay generic firms to delay entering the market. Such conduct requires courts to consider not only patent and antitrust law, but also the Hatch-Waxman Act, the complex regime governing behavior in...