Opioid Abuse and Corporate Innovation

67 Pages Posted: 11 May 2022 Last revised: 15 Nov 2022

See all articles by Kimberly Cornaggia

Kimberly Cornaggia

Pennsylvania State University - Department of Finance

John Hund

University of Georgia

Kevin Pisciotta

University of Kansas - School of Business

Zihan Ye

University of Nevada, Las Vegas

Date Written: November 12, 2022

Abstract

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

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

Kimberly Cornaggia

Pennsylvania State University - Department of Finance ( email )

306 Business Bldg
University Park, PA 16802
United States
814-865-2243 (Phone)
814-865-3362 (Fax)

HOME PAGE: http://directory.smeal.psu.edu/kjr15

John Hund

University of Georgia ( email )

Athens, GA 30602
United States

Kevin Pisciotta (Contact Author)

University of Kansas - School of Business ( email )

Capital Federal Hall
1654 Naismith Dr
Lawrence, KS 66045
United States

Zihan Ye

University of Nevada, Las Vegas ( email )

4505 S. Maryland Parkway
Las Vegas, NV 89154
United States

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