@techreport{eprints1150,
           title = {The Value of Failures in Pharmaceutical R\&D},
          author = {Jing-Yuan Chiou and Laura Magazzini and Fabio Pammolli and Massimo Riccaboni},
            year = {2012},
            note = {The paper was presented at the 4th ZEW Conference on Economics of Innovation and Patenting, Mannheim, May 19-20, 2011. Comments from Andrew Toole, Frank Rothaermel, Ren?e Belderbos, Bart Leten and conference participants are gratefully acknowledged.},
            type = {EIC working paper series},
     institution = {IMT Institute for Advanced Studies Lucca},
       publisher = {IMT Institute for Advanced Studies},
           month = {January},
             url = {http://eprints.imtlucca.it/1150/},
        abstract = {We build a cumulative innovation model in which both success and failure provide valuable information for future research. To test this learning mechanism, we use a dataset covering outcomes of world-wide R\&D projects in the pharmaceutical industry, and proxy knowledge flows with forward citations received by patents associated with each project. Empirical results confirm theoretical predictions that patents associated with successfully completed projects (i.e., leading to drug launch on the market) receive more citations than those associated to failed (terminated) projects, which in turn are cited more often than patents lacking clinical or preclinical information. We therefore offer evidence of the value of failures as research inputs in (pharmaceutical) innovation.},
        keywords = {JEL-codes: D23; D83; O3 }
}