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What do patent-based measures tell us about product commercialization? Evidence from the pharmaceutical industry

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  • Wagner, Stefan
  • Wakeman, Simon

Abstract

Patent-based measures are frequently used as indicators in empirical research on innovation and technological change. Currently, there is little evidence as to what extent patent-based indicators relate to product market outcomes. Using a unique dataset that links outcomes from product commercialization in the pharmaceutical industry with detailed patent data, we relate patent-based indicators that capture either an invention's value or the uncertainty surrounding the patenting process to the outcomes of the product development process. Our findings suggest that the speed of commercialization increases with value but reduces with uncertainty. Using a variety of alternative indicators we derive implications for the use and the proper interpretation of individual measures. Moreover, our study has broader implications as it highlights the detrimental effect of uncertainty on the speed of innovation.

Suggested Citation

  • Wagner, Stefan & Wakeman, Simon, 2016. "What do patent-based measures tell us about product commercialization? Evidence from the pharmaceutical industry," Research Policy, Elsevier, vol. 45(5), pages 1091-1102.
  • Handle: RePEc:eee:respol:v:45:y:2016:i:5:p:1091-1102
    DOI: 10.1016/j.respol.2016.02.006
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