Research and Market Structure: Evidence from an Antibiotic-Resistant Pathogenic 
Outbreak

Aggarwal, Mayank; Chakrabarti, Anindya S.; Chatterjee, Chirantan; Higgins, Matthew John

doi:10.3386/w28840

Item

ITEM ACTIONSEXPORT

Add to Basket

Local TagsRelease HistoryDetailsSummary

Released

Paper

Research and Market Structure: Evidence from an Antibiotic-Resistant Pathogenic Outbreak

MPS-Authors

/persons/resource/persons231728

Higgins, Matthew John
MPI for Innovation and Competition, Max Planck Society;

External Resource

https://doi.org/10.1016/j.respol.2022.10463
(Publisher version)

Fulltext (restricted access)

There are currently no full texts shared for your IP range.

Fulltext (public)

There are no public fulltexts stored in PuRe

Supplementary Material (public)

There is no public supplementary material available

Citation

Aggarwal, M., Chakrabarti, A. S., Chatterjee, C., & Higgins, M. J. (2021). Research and Market Structure: Evidence from an Antibiotic-Resistant Pathogenic Outbreak. NBER Working Paper, 28840.

Cite as: https://hdl.handle.net/21.11116/0000-000E-6FB0-F

Abstract

Do upstream research shocks impact unconnected downstream product markets? We explore this question using a natural experiment involving a publication that identified a pathogenic outbreak in India involving a carbapenem antibiotic resistant superbug. Consistent with theory, we find that this upstream research shock caused multinational firms selling carbapenem antibiotics in India to reduce their downstream market exposure. Rational antibiotic stewardship implies that we should observe a similar response by domestic Indian firms. Surprisingly, we observe the opposite; domestic Indian firms filled the void in the market left by multinational firms. We confirm this aggregate finding with prescription level data, Indian physicians prescribed fewer focal multinational products relative to domestic firm products. Results are robust to alternate control groups and placebo testing. Implications for antibiotic resistance, global health policy and innovation policy are discussed.