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on Technology and Industrial Dynamics |
| By: | Dubois, Pierre; de Mouzon, Olivier; Scott Morton, Fiona; Seabright, Paul |
| Abstract: | This paper quanti es the relationship between market size and innovation in the pharmaceutical industry. We estimate the elasticity of innovation, as measured by the number of new chemical entities appearing on the market for a given disease class, to the potential market size represented by the willingness of su¤erers of diseases in that class (and others acting on their behalf such as insurers and governments) to spend on their treatment during the patent lifetime. We nd positive signi cant elasticities with a point estimate under our preferred speci cation of 25.2%. This suggests that at the mean market size an additional $1.8 billion is required in additional patent life revenue to induce the invention of one additional new chemical entity. An elasticity substantially and signi cantly below one-half is also a plausible implication of the hypothesis that innovation in pharmaceuticals is becoming more di¢ cult and expensive over time, as costs of regulatory approval rise and as the industry runs out of "low hanging fruit". |
| Keywords: | Innovation, Market Size, Elasticity, Pharmaceuticals |
| JEL: | O31 L65 O34 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:24352&r=tid |
| By: | Duschl, Matthias; Schimke, Antje; Brenner, Thomas; Luxen, Dennis |
| Abstract: | In this paper the relationship between firm growth and external knowledge sources, such as related firms and universities, is studied. The spatial characteristics of these relationships are examined by geolocating firms into a more realistic relational space using travel time distances and using flexible distance decay function specifications. This approach properly accounts for growth relevant knowledge spillovers and allows for estimating their spatial range and functional form. Applying quantile regression techniques on a large sample of German manufacturing firms, we show that the impact of external factors substantially differ along firms' size, type of knowledge source and growth level. -- |
| Keywords: | Firm growth,external factors,universities,agglomeration,space,spatial range,distance decay functions,knowledge spillovers,high growth firms,quantile regression |
| JEL: | C31 D92 L25 R11 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:kitwps:36&r=tid |
| By: | Toole, Andrew A. |
| Abstract: | While most economists believe that public scientific research fuels industry innovation and economic growth, systematic evidence supporting this relationship is surprisingly limited. In a recent study, Acemoglu and Linn (2004) identified market size as a significant driver of drug innovation in the pharmaceutical industry, but they did not find any evidence supporting science-driven innovation from publicly funded research. This paper uses new data on biomedical research investments by the U.S. National Institutes of Health (NIH) to examine the contribution of public research to pharmaceutical innovation. The empirical analysis finds that both market size and NIH funded basic research have economically and statistically significant effects on the entry of new drugs with the contribution of public basic research coming in the earliest stage of pharmaceutical drug discovery. The analysis also finds a positive return to public investment in basic biomedical research. -- |
| Keywords: | R&D,NIH,social return,biomedical,research lags,public science,new molecular entities |
| JEL: | O31 O32 L65 H51 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:11063&r=tid |