hong luo

Abstract

We examine the relationship between product liability litigation and innovation by systematically combining data on product liability lawsuits with data on new product introductions in a panel dataset of leading medical device firms. We first document a decline in the propensity to introduce new products for both defendant firms and other firms operating in litigated device categories. This decline, however, does not spill over to other device categories, and we also do not find any slowing down in firms' patenting activities. We then show that changes in two features of the regulatory environment---(1) the availability of public information regarding adverse events and (2) federal law taking precedence over state law---substantially affect the likelihood of litigation. These changes also provide quasi-exogenous variations in litigation that confirm our baseline findings. Finally, we show that litigation appears to induce firms to develop safer devices. Overall, our findings suggest that product liability litigation affects the rate and direction of technological progress, and that safety regulation and liability regimes interact with one another in significant ways.

Dear Attendees,

We must unfortunately cancel today's workshop scheduled for February 12, 2024, as our speaker, Francesco Di Lorenzo, is unwell. We apologize for the short notice and any inconvenience this may cause.

We are in the process of arranging a new date and will inform you as soon as possible. Should you have any questions or concerns, feel free to reach out at virtual.sieworkshop@gmail.com.

We look forward to seeing many of you in two weeks with Caroline Fry from the University of Hawai'i, Schidler College of Business. 

You can find more information about the SIE workshop here. 

Best,

Colleen Cunningham, Giada Di Stefano, Carlos Serrano, Valentina Tartari