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Evaluation and Learning in R&D Investment / Alexander P. Frankel, Joshua L. Krieger, Danielle Li, Dimitris Papanikolaou.
- Format:
- Book
- Author/Creator:
- Frankel, Alexander P.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w31290.
- NBER working paper series no. w31290
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2023.
- Summary:
- We examine the role of spillover learning in shaping the value of exploratory versus incremental R&D. Using data from drug development, we show that novel drug candidates generate more knowledge spillovers than incremental ones. Despite being less likely to reach regulatory approval, they are more likely to inspire subsequent successful drugs. We introduce a model where firms are better able to evaluate the viability of incremental drugs, but where investing in novel drugs helps firms learn about future projects. Firms appear to put more value on evaluation versus learning, and those patterns are in-part driven by the appropriability of spillovers.
- Notes:
- Print version record
- May 2023.
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