Find and Replace: R&D Investment Following the Erosion of Existing Products
利用FDA公共健康警告作为负面冲击，研究制药公司如何调整研发投资，发现受冲击企业增加研发支出，主要通过收购外部创新而非内部开发，且竞争企业会撤离相关治疗领域。
How do innovative firms react when existing products experience negative shocks? We explore this question with detailed project-level data from drug development firms. Using the Food and Drug Administration public health advisories as idiosyncratic negative shocks to approved drugs, we examine how drug makers react through investment decisions. Following these shocks, affected firms increase research and development (R&D) expenditures, driven by a higher likelihood of acquiring external innovations rather than developing novel projects internally. Such acquisition activities are concentrated in firms with weak research pipelines. We also find that competing developers move resources away from the affected therapeutic areas. Our results show how investments in specialized commercialization capital create path dependencies and alter the direction of R&D investments. This paper was accepted by Ashish Arora, entrepreneurship and innovation.