We suggest and provide empirical evidence that the bargaining power of alliance partners stemming from their prominence in alliance networks influences the ex-ante allocation of value capturing rights in high-tech alliance contracts. Network prominence can enhance the availability of alternative...

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...

We evaluate the welfare effects of differential pricing, voluntary licensing, and compulsory licensing in the Indian market for oral anti-diabetic (OAD) drugs. This market includes a new class of molecules called DPP-4 inhibitors, all of which are under patent protection in India. The Indian...

Leveraging the detailed project-level data on biotech startups and their IPO records, this paper studies how adverse selection in capital markets affects financing decisions of entrepreneurs and firm values. By structurally estimating a dynamic model that features strategic experimentation and...

This paper studies how competition impacts innovative firms’ voluntary disclosure of product quality information. Our empirical context is the pharmaceutical industry, where firms must decide whether to disclose drug quality information acquired in clinical trials. Leveraging variation in...

This article discusses the three concepts of "learning," "entrepreneurship" and "dynamics of the firm" in order to bridge some of the gap between micro and macro levels of analysis in evolutionary economics. This article addresses the following four issues: 1) Localized learning dependent on the...

In 1996, the chemical firm Monsanto bought a plant breeder that had developed a new corn hybrid, which could withstand Monsanto’s powerful herbicide Roundup. Due to the pre-existing structure of the US plant-breeding industry, this acquisition and Monsanto’s acquisition of five other corn...

These are neither the best of times nor the worst of times for the pharmaceutical industry, or for global public health. Media reports regarding recent legal developments would suggest that the originator pharmaceutical industry is facing a new and dangerous threat to its long-term welfare,...

One of the most heated discussions in economics in recent years has concerned the relationship between market structure and innovation. After a half-century of debate and innumerable studies, the consensus is that there is no clear answer to the question. On a concrete level, the uncertainty...

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...