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Market Size in Innovation: Theory and Evidence from the Pharmaceutical Industry

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  • Daron Acemoglu
  • Joshua Linn

Abstract

This paper investigates the effect of (potential) market size on entry of new drugs and pharmaceutical innovation. Focusing on exogenous changes driven by U. S. demographic trends, we find a large effect of potential market size on the entry of nongeneric drugs and new molecular entities. These effects are generally robust to controlling for a variety of supply-side factors and changes in the technology of pharmaceutical research. © 2004 MIT Press

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Paper provided by David K. Levine in its series Levine's Working Paper Archive with number 228400000000000002.

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Date of creation: 19 Aug 2004
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Handle: RePEc:cla:levarc:228400000000000002

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  1. Endogenous Technological Change and Aging Baby Boomers
    by Matthew E. Kahn in Environmental and Urban Economics on 2011-05-23 15:56:00
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