When does product liability risk chill innovation? Evidence from medical implants
Alberto Galasso - Rotman School of Management
The Institute of Economics will hold a webinar meeting as part of its Seminar Series on Tuesday, January 26, 2020: Alberto Galasso from the Rotman School of Management of the University of Toronto will present the paper "When does product liability risk chill innovation? Evidence from medical implants".
Liability laws designed to compensate for harms caused by defective products may also affect innovation. The authors examine this issue by exploiting a major quasi-exogenous increase in liability risk faced by US suppliers of polymers used to manufacture medical implants. Difference-in-differences analyses show that this surge in suppliers' liability risk had a large and negative impact on downstream innovation in medical implants, but it had no significant effect on upstream polymer patenting. The authors' findings suggest that liability risk can percolate throughout a vertical chain and may have a significant chilling effect on downstream innovation.
The full paper is available here.
All interested participants are welcome to join online at the following link. External participants need to contact the organisers via email to grant access to the seminar.