NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Charu N. Gupta

The Wharton School
University of Pennsylvania
Colonial Penn Center
3641 Locust Walk
Philadelphia, PA 19104

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Institutional Affiliation: University of Pennsylvania

NBER Working Papers and Publications

October 2018Firm Scope and Spillovers from New Product Innovation: Evidence from Medical Devices
with Matthew Grennan, Mara Lederman: w25183
When firms span related product categories, spillovers across categories become central to firm strategy and industrial policy, due to their potential to foreclose competition and affect innovation incentives. We exploit major new product innovations in one medical device category, and detailed sales data across related categories, to develop a causal research design for spillovers at the customer level. We find evidence of spillovers, primarily associated with complementarities in usage. These spillovers imply large benefits to multi- vs. single-category firms, accounting for nearly one quarter of sales in the complimentary category (equivalent to four percent of revenue in the focal category).
 
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