Opioid Abuse and Corporate Innovation

We find that local opioid abuse reduces corporate innovation. The quantity and stock market value of patents decline in affected areas, as does venture capital investment and new business applications. We provide evidence that these results reflect labor supply rather than product demand shocks, and analyses of local income and labor market movements indicate that our results are driven by spillover effects of opioid abuse on non-users. The opioid-driven declines in corporate innovation contribute to persistent declines in local economic growth. Our results reveal previously unidentified long-lasting spillover effects of community health problems on skilled labor, innovation, and economic growth.

Keywords: Corporate Innovation, Patents, M&A, Opioid Abuse, Inventor Mobility

JEL Classification: E24, G14, G18, I10, I15, O30, R2

Suggested Citation: Suggested Citation

Cornaggia, Kimberly and Hund, John and Pisciotta, Kevin and Ye, Zihan, Opioid Abuse and Corporate Innovation (November 12, 2022). Available at SSRN: https://ssrn.com/abstract=4104835 or http://dx.doi.org/10.2139/ssrn.4104835