July 10, 2020

Brown Bag Seminar Cluster Industrial Economics

Determinants and effects of mergers and acquisitions: Evidence from drug projects in the diabetes market

Date

July 10, 2020
15:00 - 15:30

Location

Online seminar via Webex

Speaker

Jan Malek

This is an online seminar using Webex. You will receive the login data with the invitation to the talk.

Abstract:   There is an ongoing debate both in academia and in policy circles about the effects of takeovers of small, young firms by large incumbents in innovative industries. Many argue that such takeovers are anticompetitive and harm innovation by killing off nascent competition. However, empirical evidence for or against this claim is scarce. Using project-level data with matched patents, mapping the diabetes R&D landscape between 1997-2017, we investigate both the determinants and the effects of take-overs of projects occurring before their launch. As regards determinants, we find that big firms are not the most likely acquirers. Most transactions occur between small and pipeline firms and happen before entering clinical trials. Using the determinants analysis and matching techniques to account for selection, we then explore the effects. A very preliminary analysis reveals that the acquired project are more likely to be launched – but only the radical ones. We also find evidence that the own, non-acquired diabetes projects of acquirers are less likely to be discontinued and more likely to be launched.

(joint with Melissa Newham, Jo Seldeslachts, and Reinhilde Veugelers)

Speaker

Jan Malek, DIW Berlin & KU Leuven