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Blockbusters, Sequels and the Nature of Innovation / Wesley M. Cohen, Matthew J. Higgins, William D. Miles, Yoko Shibuya.
- Format:
- Book
- Author/Creator:
- Cohen, Wesley M.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w33957.
- NBER working paper series no. w33957
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2025.
- Summary:
- Using detailed product- and invention-level data from the pharmaceutical industry, we demonstrate that firms with high-selling "blockbuster" drugs concentrate their development efforts on new drugs that target the same customer segments and are technologically similar to existing offerings. We propose that this pattern can be explained by an expectation of "demand stickiness", whereby firms expect current sales to persist when follow-on products offer similar functionality, making investment in the development of similar technology within that customer segment more likely. Firms' marketing and R&D capabilities reinforce this behavior, but they do not fully explain it. By shifting the focus from firm-level characteristics to product-level drivers of innovation, our findings highlight how the commercial success of individual products shapes the direction of technological change in R&D-intensive industries.
- Notes:
- June 2025.
- Print version record
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