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Learning from successes and failures in pharmaceutical R&D

Author

Listed:
  • Jing-Yuan Chiou

    (National Taipei University)

  • Laura Magazzini

    (University of Verona)

  • Fabio Pammolli

    (IMT Institute for Advanced Studies)

  • Massimo Riccaboni

    (IMT Institute for Advanced Studies
    K.U. Leuven)

Abstract

In this paper, we build a cumulative innovation model to understand the role of both success and failure in the learning dynamics that characterize pharmaceutical R&D. We test the prediction of our model by means of a unique dataset that combines patent information with R&D projects, thus distinguishing patents related to successfully marketed products from those covering candidate drugs that failed in clinical trials. Results confirm model predictions showing that patents associated with successfully completed projects receive more citations than those associated with failed projects. However, we also show that failed projects can be in turn cited more often than patents lacking clinical or preclinical information. We further explore the ‘black box’ of innovation, providing evidence that both successes and failures contribute to R&D investment decisions and knowledge dynamics in science-driven sectors.

Suggested Citation

  • Jing-Yuan Chiou & Laura Magazzini & Fabio Pammolli & Massimo Riccaboni, 2016. "Learning from successes and failures in pharmaceutical R&D," Journal of Evolutionary Economics, Springer, vol. 26(2), pages 271-290, May.
    • Handle: RePEc:spr:joevec:v:26:y:2016:i:2:d:10.1007_s00191-015-0439-z
    DOI: 10.1007/s00191-015-0439-z
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    3. Mike Thelwall & Kayvan Kousha, 2016. "Are citations from clinical trials evidence of higher impact research? An analysis of ClinicalTrials.gov," Scientometrics, Springer;Akadémiai Kiadó, vol. 109(2), pages 1341-1351, November.
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    More about this item

    Keywords

    R&D competition; Pharmaceutical industry; Knowledge flows; Technological trajectories;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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