The Power of the Regulator: Regulatory Guidance and the Firms that Didn't Follow It During the Emergence of U.S. COVID-19 Diagnostics

43 Pages Posted: 5 Jul 2024

See all articles by Seojin Kim

Seojin Kim

Drexel University - Bennett S. LeBow College of Business

J.P. Eggers

New York University

Date Written: July 01, 2024

Abstract

We explore how regulators shaped market structures and firm strategies during the grand challenge of scaling U.S. testing during the COVID-19 pandemic. Our multi-method analysis reveals that regulators favored molecular (PCR) tests, creating an inadvertent bottleneck in rapid (antigen) test availability. Critically, we find that firms with outside options (either global markets or firms pursuing both types of tests) were more likely to develop antigen tests, as were firms with previous FDA experience. These large, successful firms played a critical role in addressing the gap in regulatory guidance, and preserved market variety and flexibility in a rapidly changing, unpredictable crisis environment. We underscore the necessity for regulatory flexibility, offering insights into the role of regulators and firms in addressing global grand challenges.

Keywords: grand challenges, regulatory uncertainty, nascent industries, firm strategies

Suggested Citation

Kim, Seojin and Eggers, J.P., The Power of the Regulator: Regulatory Guidance and the Firms that Didn't Follow It During the Emergence of U.S. COVID-19 Diagnostics (July 01, 2024). Available at SSRN: https://ssrn.com/abstract=4883736 or http://dx.doi.org/10.2139/ssrn.4883736

Seojin Kim (Contact Author)

Drexel University - Bennett S. LeBow College of Business ( email )

101 N. 33rd St.
Philadelphia, PA 19104
United States

J.P. Eggers

New York University ( email )

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
82
Abstract Views
344
Rank
652,529
PlumX Metrics