Spillovers Across Product Categories in the Medical Device Industry
49 Pages Posted: 7 Nov 2018 Last revised: 6 Aug 2020
Date Written: May 5, 2020
We use detailed panel data at the buyer level to understand the size and nature of spillovers across product categories in medical devices. Difference-in-differences regressions identify spillovers in usage (accounting for 21 percent of market share) across categories that share physical features. All categories exhibit spillovers in contracting (accounting for 7 to 18 percent of the probability of contracting). These buyer-level spillovers represent up to half of all potential demand spillovers and one-third of the overall correlation in shares across categories, suggesting meaningful implications for firm strategy and antitrust policy for firms selling in multiple product categories.
Keywords: Innovation, Economies of Scope, Spillovers
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