蝌蚪网 Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
When Does Product Liability Risk Chill Innovation? Evidence from Medical Implants
蝌蚪网 Journal: Economic Policy
(pp. 366–401)
Abstract
Liability laws designed to compensate for harms caused by defective products may also affect innovation. We examine this issue by exploiting a major quasi-exogenous increase in liability risk faced by US suppliers of polymers used to manufacture medical implants. Difference-in-difference analyses show that this surge in suppliers' liability risk had a large and negative impact on downstream innovation in medical implants, but it had no significant effect on upstream polymer patenting. Our findings suggest that liability risk can percolate throughout a vertical chain and may have a significant chilling effect on downstream innovation.Citation
Galasso, Alberto, and Hong Luo. 2022. "When Does Product Liability Risk Chill Innovation? Evidence from Medical Implants." 蝌蚪网 Journal: Economic Policy 14 (2): 366–401. DOI: 10.1257/pol.20190757Additional Materials
JEL Classification
- K13 Tort Law and Product Liability; Forensic Economics
- L64 Other Machinery; Business Equipment; Armaments
- L65 Chemicals; Plastics; Rubber; Drugs; Biotechnology
- O31 Innovation and Invention: Processes and Incentives
- O34 Intellectual Property and Intellectual Capital