Dranove, David
[Verfasser:in]
;
Garthwaite, Craig
[Sonstige Person, Familie und Körperschaft];
Hermosilla, Manuel
[Sonstige Person, Familie und Körperschaft]
Expected Profits and the Scientific Novelty of Innovation
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments March 2020 erstellt
Beschreibung:
Innovation policy involves trading off monopoly output and pricing today in exchange for incentives for firms to develop new products. While existing research demonstrates that expected profits fuel R&D investments, little is known about the novelty of funded projects. We expand this literature by examining the scientific novelty of pharmaceutical R&D following the creation of Medicare Part D. We find little evidence that the implied positive demand shock prompted firms to undertake scientifically novel R&D, as measured by whether scientific approaches had been used before. However, some evidence suggests that firms invested in products involving novel combinations of scientific approaches