Events

Mr. Rohin Vrajesh
P.h.D candidate
Bocconi University

Intangible assets are a significant portion of a firms value and firms use secrecy, lead time among other mechanisms to protect the value created using these assets. Despite these efforts exogenous events, such as publicly funded research, can disclose firm’s proprietary knowledge thus impacting its ability to capture value. Therefore, this paper studies how firms in the pharmaceutical sector respond to the public release of the molecular characterization of cancers. In line with prior literature I find that public data release reduces the search costs in the mapped cancer domains and enables the entry of new firms. However, the entry of new firms is concentrated in domains where it is relatively easier to acquire the complementary assets for commercialization. On the other hand, incumbent firms that were active in cancer areas that witness an influx of new firm entries reduce their clinical trial activity. This paper thus shows that publicly funded research does not raise all boats equally. The effect depends on whether firms have access to complementary assets