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Patents, Spillovers, and Competition in Biotechnology

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  • Austin, David H.

Abstract

I perform an event study on 600+ patents awarded primarily to 20 leading biotechnology firms and find significant changes in market values at the time of the awards. Adjusting for partial anticipation of events, I estimate that core technology patents in highly contested research areas are expected to generate between $13 and $21 million of economic value. They also generate spillover benefits for the patentee's rivals-presumably including knowledge transfers-valued at $3 to $6 million per firm. Awardees may appropriate only half of private benefits, although I observe negative spillovers for some high-profile awards. Most patents have no significant market impact.

Suggested Citation

  • Austin, David H., 2000. "Patents, Spillovers, and Competition in Biotechnology," Discussion Papers 10808, Resources for the Future.
  • Handle: RePEc:ags:rffdps:10808
    DOI: 10.22004/ag.econ.10808
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    Cited by:

    1. Sandy Campart & Etienne Pfister, 2014. "Technological races and stock market value: evidence from the pharmaceutical industry," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 23(3), pages 215-238, April.

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