What Do Patent-Based Measures Tell Us About Product Commercialization? Evidence from the Pharmaceutical Industry

44 Pages Posted: 8 Feb 2014 Last revised: 28 Nov 2016

See all articles by Stefan Wagner

Stefan Wagner

ESMT European School of Management and Technology

Simon D. Wakeman

Ministry of Business, Innovation and Employment

Date Written: March 9, 2015

Abstract

Patent-based measures are frequently used as indicators in empirical research on innovation and technological change. Currently, there is little evidence as to what extent patent-based indicators relate to product market outcomes. Using a unique dataset that links outcomes from product commercialization in the pharmaceutical industry with detailed patent data, we relate patent-based indicators that capture either an invention’s value or the uncertainty surrounding the patenting process to the outcomes of the product development process. Our findings suggest that the speed of commercialization increases with value but reduces with uncertainty. Using a variety of alternative indicators we derive implications for the use and the proper interpretation of individual measures. Moreover, our study has broader implications as it highlights the detrimental effect of uncertainty on the speed of innovation.

Keywords: Patent indicators, patent system, product commercialization, pharmaceutical industry, drug development

Suggested Citation

Wagner, Stefan and Wakeman, Simon D., What Do Patent-Based Measures Tell Us About Product Commercialization? Evidence from the Pharmaceutical Industry (March 9, 2015). ESMT Working Paper No. 14-01 (R1). Available at SSRN: https://ssrn.com/abstract=2391786 or http://dx.doi.org/10.2139/ssrn.2391786

Stefan Wagner (Contact Author)

ESMT European School of Management and Technology ( email )

Schlossplatz 1
10117 Berlin
Germany

Simon D. Wakeman

Ministry of Business, Innovation and Employment ( email )

Level 8, 33 Bowen Street
PO Box 5488
Wellington 6011
New Zealand

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