When Does Product Liability Risk Chill Innovation? Evidence from Medical Implants

• 成果类型: Article
• 署名作者: GALASSO, A. L. B. E. R. T. O.; LUO, H. O. N. G.
• 署名单位: University of Toronto; National Bureau of Economic Research; Harvard University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.20190757
• 发表日期: 2022
• 页码: 366-401
• 关键词: research-and-development; Tort reform; IMPACT; STANDARDS

摘要

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.