Abstract

http://ssrn.com/abstract=2154510
 


 



First-Mover Advantages Before and After TRIPS: Evidence from the Indian Pharmaceutical Industry


Ajay Bhaskarabhatla


Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Erasmus Research Institute of Management

Chirantan Chatterjee


Indian Institute of Management (IIMB), Bangalore

September 30, 2012


Abstract:     
Scholars argue that the presence of persistent first-mover advantages obviates the need for relatively long-lived patents as incentives for innovations. What then is the impact of the strengthening of patent protection, particularly in developing economies, on non-patent-based first-mover advantages? We investigate this question by estimating the extent of erosion of first-mover advantages in the Indian pharmaceutical industry due to the introduction of a stronger product-patent regime in January 2005. We distinguish between newly created and pre-existing markets, in which the strength of product patent protection differs systematically. Our analyses account for the endogeneity of entry order. We find evidence of erosion — as high as 50-percent — that is robust to alternative estimation strategies and definitions of dependent variables. We extend the Suarez-Lanzolla framework and highlight the role of regulatory factors on the relationship between first-mover advantages and intellectual property rights. We conclude by discussing managerial and policy implications.

Number of Pages in PDF File: 32

Keywords: first-mover advantage, pharmaceuticals, TRIPS, India

JEL Classification: O31, O34, O38, L65

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Date posted: September 30, 2012 ; Last revised: March 8, 2014

Suggested Citation

Bhaskarabhatla, Ajay and Chatterjee, Chirantan, First-Mover Advantages Before and After TRIPS: Evidence from the Indian Pharmaceutical Industry (September 30, 2012). Available at SSRN: http://ssrn.com/abstract=2154510 or http://dx.doi.org/10.2139/ssrn.2154510

Contact Information

Ajay Bhaskarabhatla (Contact Author)
Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )
P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands
+31 10 408 1004 (Phone)
HOME PAGE: http://people.few.eur.nl/bhaskarabhatla/
Erasmus Research Institute of Management ( email )
P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 10 408 1004 (Phone)
HOME PAGE: http://www.erim.eur.nl/people/ajay-bhaskarabhatla/
Chirantan Chatterjee
Indian Institute of Management (IIMB), Bangalore ( email )
Bannerghatta Road
Bangalore, Karnataka 560076
India
08026993141 (Phone)
HOME PAGE: http://www.iimb.ernet.in/user/185/chirantan-chatterjee

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