Spillovers Across Product Categories in the Medical Device Industry

49 Pages Posted: 7 Nov 2018 Last revised: 6 Aug 2020

See all articles by Matthew Grennan

Matthew Grennan

National Bureau of Economic Research (NBER); University of California, Berkeley - Haas School of Business

Charu Gupta

University of California, Los Angeles (UCLA) - Anderson School of Management

Mara Lederman

University of Toronto - Rotman School of Management

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Date Written: May 5, 2020

Abstract

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

Suggested Citation

Grennan, Matthew and Grennan, Matthew and Gupta, Charu and Lederman, Mara, Spillovers Across Product Categories in the Medical Device Industry (May 5, 2020). Available at SSRN: https://ssrn.com/abstract=3266574 or http://dx.doi.org/10.2139/ssrn.3266574

Matthew Grennan (Contact Author)

National Bureau of Economic Research (NBER) ( email )

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University of California, Berkeley - Haas School of Business ( email )

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Charu Gupta

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

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Los Angeles, CA 90095-1481
United States

Mara Lederman

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

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